Guzmán covered the debt maturities with the help of the Central Bank and public bodies

The official strategy to calm the storm unleashed on the markets has yielded some results, but without dispelling the uncertainty. Inflation-adjusted pesos (CER) bonds improved their price thanks to strong official purchases and the Ministry of Economy managed to cover the debt maturities on Tuesday. The downside was intervention by the Central Bank with new purchases of securities and the apparent participation of public bodies public auction.

In this way, Martin’s team Guzmán raised $ 21,587 million, more than reaching the $ 11,000 million owed this week, dominated by the tensions that erupted the previous week with the outflow of funds from CER (Lecer) bills and the collapse of their values. The massive sales forced the improvisation of an emergency plan together with the head of the BCRA, Miguel Pesce, in which the race was a fundamental test.

After disarming $ 36,852 million this Monday, Pesce had to continue buying stocks this Tuesday to support his price and lower rates, which have risen to 13% above secondary market inflation. In other words, the Central had to pay more for the Treasury bills so that they were not devalued, which allowed Guzmán to go out and finance himself without shifting rates too much.

Decidedly, The economy did not offer a premium and the new funds raised were also not significant. Due to the growing difficulties in extending the renewal terms, the menu consists of five titles with a duration not exceeding six months and 63% of the placement is concentrated in Lecers, reflecting the preference for hedges, despite the slowdown in the inflation, which in May showed 5%.

“Looking at the instruments, the placement rates at first sight appear to be lower than those offered by these securities in the secondary market. In fact, the LECER for October and December was respectively 2.02% and 3.01%, which are around around -120bps and -75bps below the market, so as expected, we consider it there was strong participation from public sector organizations“, he indicated PPI.

Analysts believe that the market is “anesthetized” by the BCRA and that given the Treasury rates it is even more profitable to buy bonds on the secondary market, instead of the Guzmán races. Short-term fixed-rate securities, on the other hand, were offered at rates between 49 and 53%, in both cases below the 60.7% annualized inflation recorded in May and 72.6%. % forecast by the market by 2022.

The acid proof will be the last auction of the month in which a mega maturity of over $ 550 trillion must be covered. “Looking at the closing prices of the secondary market, Finance has approached the rate, but has not provided a premium spread. There was probably a strong presence of public creditors todayhowever, today’s race was more of a formality, the event is at the end of the month, “he said Lucio Garay Gomezfrom EcoGo.

After being unable to cover payments in April, Economy will need to improve performance to reduce the BCRA’s monetary assistance as agreed with the IMF. It will also be a challenge to prevent outflows of funds from putting further pressure on financial dollars. “It seems complicated, it requires a rate hike from the Treasury and may even require an additional boost from banking regulations“, She said Lorraine Georgechief economist at equilibrium.