The Central Bank launches insurance so that banks can sell it T-bills

After the stabilization package announced on Monday by the Ministry of Economy with targeted fiscal austerity measures curb devaluation and inflationary pressures, The Central Bank will launch new initiatives this Wednesday a support the placement of bonds in pesos and requests for guarantees from private banks.

One of these will be the launch this Wednesday of a “put” (sale transaction) or insurance issued by the BCRA so that banks can buy Economy bonds at a cost of 2% per year and the guarantee that they can sell them to the power plant in the future. Thus, it was announced Monday morning by the entity’s general manager, Agustín Torcassi, to a group of banks.

According to sources from the financial sector, from the next Treasury tender, banks will be able to award a put through which they will be able to transform the risk of Treasury bills into “BCRA risk”. The operation will be implemented through a contract with the Central Bank separately from the auction of Economy bonds and the decision to buy them will depend on the institutions.

Since the beginning of the bullfight in early June with the massive outflow of funds from Treasury bills in pesos, the authority chaired by Miguel Pesce bought more than $ 1.2 billion of such securities to support their prices, accelerate the money supply. The “put” would be a further step by the entity to reinforce the official promise that there will be no re-profiling.

The new secretary of finance, Eduardo Setti, has communicated several times this Monday with the BCRA to coordinate the race on Wednesday, in which it will have to cover deadlines of 11,000 million dollars. Although payments are low, $ 480 billion is owed at the end of the month and in September $ 1.2 billion. What is sought is to clarify doubts about the ability to roll over the debt.

This is why interest rates and dollar-adjusted securities are expected to rise, as well as inflation-following bonds (CERs). The other measure of the Central Bank will be the reduction from four to three months of the minimum term that banks can deposit in Treasury bills, i.e. lace for which they get a return.