Economy Minister Martin Guzmán is looking for pesos to finance the deficit
Between tensions on the bond market and doubts about the government’s ability to roll over the debt in pesos expiring next week, the Minister of Economy, Martín Guzmán, received representatives from the Association of Argentine Banks (Adeba) in his portfolio this Wednesday at 17:00 as part of a series of contacts to review the financial scenario and the situation the sector.
The meeting took place on a day marked by a new decline in the price of securities in pesos (they had fallen by 3.98% on TX24), which had recovered over the weekend after the Central Bank’s battery of purchases launched on the secondary market, where it bought over $ 400 billion to support its value, according to official data. In particular, inflation-linked bonds (CERs) were hit, with declines of between 0.04 and 3.98%.
In this context, Guzmán was interested in knowing the opinion of the banks on the functioning of money and financial markets. And he in turn acknowledged that in the first half of the year there were “deviations” in tax matters, due to the war, the jump in energy imports and social containment measures, but he assured that it could be corrected in the second half and that the objectives with the IMF will be achieved.
The state of public accounts is something that worries the banks. Fiscal data for May, released on Tuesday, showed a primary deficit of $ 191 billion, well above last year and 130% higher than in April. That number not only complicates compliance with the fiscal target with the IMF (it is already around 0.6% of GDP and the annual limit is 2.5% of GDP), but also puts pressure on the placement of Treasury bonds to finance increased spending.
Guzmán was accompanied by the Secretary of the Treasury, Raúl Rigo, his financial counterpart, Rafael Brigo, and other members of his team., which in the pre-meeting enthusiastically welcomed the results of Wednesday’s stock swap, with fixed rate bills adjusted for inflation. The surprise measure allowed to unpack next Tuesday’s race, reducing maturities from $ 605,886 million to $ 248,000 million.
Get past the exchange, which included calls to city players and a participation of about 40% of the public sector, with the Central Bank in the lead, the bankers noted their contribution to the financial program, citing the increase in their bond holdings over the past two years. According to PPI data, these assets in the hands of public and private sector banks now account for about 55% of the liquidity in pesos of the financial system. Next week Guzmán would go out looking for the change after the trade, about $ 248,000 million.
“We banks are here to be the lever for reactivation, but for this we need to correct some distortions caused by the pandemic”, they re-launched at a meeting by Adeba, represented by its owner, Javier Bolzico, and by the managers of five institutions. Therefore, they indicated minimum forward rates and Now 12. The former rose to 53%, increasing banks’ costs, and the latter between 42 and 49%, again below inflation.
On the other hand, bankers raised the need to create the conditions to increase credit to the private sector, and their concern about Central Bank taxes and regulations that reward the use of cash and “penalize” digital money. . “It was a meeting in which technical issues were addressed, numbers in hand, productive and cordial, nothing specific was discussed about the next race, nor was there any request”, said sources close to the meeting.
The next meeting will be tomorrow with the representatives of foreign banks (ABA).
Source: Clarin
