In line with the Central Bank, Economy raised rates and placed $ 182,000 million in bonds

On a day marked by the Central Bank’s rate hike to contain the acceleration of inflation and devaluation pressures, the Ministry of Economy turned on the weight vacuum cleaner and went into debt for $ 182,000 million. So he allowed the first race of the massase era cover maturities, at the cost of offering a higher return investors, who mostly opted for short stocks up to three months.

The amount obtained exceeded the expectations of the officials and left a positive balance of $ 67,000 million, Discount on weekly payments of $ 115.318 million. Commitments were actually higher, but they were reduced by Wednesday’s super bond swap. The operation, in which there was a significant public sector involvement and strong coverage to banks, deferred maturities of $ 2 billion until August 2023.

Less demanded, but in a still sensitive environment due to the strong expansion in monetary issuance that resulted in the BCRA repurchasing $ 1.2 trillion of bonds from the June financial rush, the Treasury took another step this Thursday. and he adjusted rates by nearly five points. In the case of the discount letter (LEDE) with a duration until November, the nominal annual rate goes from 70% to 75.6% (98.1% effective).

Most of the -70% placement – was concentrated in that stock and an inflation-adjusted letter (CER) until February, which was 1 point below the change in the CPI, “slightly below. of the range in which we saw it exit, and similar to where it was trading before the announcement of conditions, ”according to PPI. The remainder was transferred in a very short-term letter (20-day LELITE), with a rate of 55%.

The Ministry of Finance has thus aligned itself with the Central Bank, which in the previous hours has raised its reference rate (LELIQ) by almost 10 points, reaching the nominal 65.9% (actual 96.4%). Both measures reflect the economic team’s concern to stabilize inflation, which rose to 7.4% per month in July – the highest level in 20 years – and to reduce demand for dollars in a context in which that of the blue dollar rose this Thursday to $ 297.

After the crisis unleashed in June, when there was a massive outflow of funds from CER bonds, partly towards the dollar, the government replaced two economy ministers and ordered emergency measures to avoid a reprofiling of the debt into pesos. going through rate hikes, a “anti-collapse” guarantee to banks (PUT) and hedging with double indexation – for inflation and devaluation – in the dual bonds of the latest swap.

The landing of Massa, in turn, has led to greater fiscal constraints and a brake on the issuance of BCRAs to cover Treasury expenses, which requires higher levels of debt to finance public accounts. Although the Economy received extra funding this Thursday (after paying deadlines), half of it is made up of a 20-day bill, said Gabriel Caamaño, of Consultora Ledesma.

“According to our estimates, the Treasury needs $ 830 trillion in net funding in the year – consistent with meeting the fiscal and monetary target – well, today it has already been able to get 110 trillion of that amount. dollars and several bids remain in progress rest of the year After the rate hike, it is important that the Treasury sterilizes the pesos again and does not add pressure to the central bank, “said Lucio Garay Méndez, an analyst at EcoGo.

The other aspect of the financial program agreed with the IMF in an inflationary framework is that the Treasury must offer increasing levels of coverage or indexation to capture pesos from the market, reducing the ability to liquidate these pesos commitments in the future. The rise in BCRA rates, on the other hand, affects the interest that must be paid to adjust the debt of private banks (LELIQ) to absorb the monetary issue.

“Despite the fact that in August the rate is likely to remain below inflation in the monthly comparison, everything seems to indicate that the government is aiming for a moderation in the evolution of prices allows us to offer positive monthly payments in real terms since September. With a stock of LELIQS of around 6 billion, it is more than clear that this type of decision will lead to a greater quasi-fiscal deficit, “said Bruno Nicolás Bonfanti, of Ecolatina.