With rates close to 100%, Economy placed $ 285 billion and covered maturities

Almost two months after the start of the financial crisis that triggered the exit of investment funds from Treasury bills, The government placed $ 285 billion in pesos debt this Monday and covered nearly three times the maturities of debt this week.

The Ministry of Finance achieved this result supported by the measures put in place last month, including a sharp rise in interest rates and postponement of payments with bond swapsLike the one in early August. This program made it possible to meet commitments of nearly $ 90 billion this Thursday and to obtain funding for an additional $ 197 billion.

With 1,730 bids, most of the bidding focused on a Discount Bill (LEDE) with a duration until December, another in January 2023, and an Inflation Adjusted Bill (LECER) in June next year. According to Pedro Siaba Serrate of PPI, LEDES closed with nominal rates of 75.34% and 77.04% per annum, in line with the previous tender, which in actual terms is around 98%.; while the LECER cut 0.51% above forecast inflation.

In the last auction, the Treasury aligned itself with the Central Bank, which at the beginning of August raised the reference rate (LELIQ) by almost 10 points to reach 65.9% nominal (96.4% effective), at a time when the market expects inflation close to triple digits.

“What we see is that the Treasury is paying rates fairly in line with inflation and placing short debts up to no later than STEP 2023.the economist said Jorge Neiro.

According to the specialist, Economy rates yield 6% monthly, in line with the floor expected for the August price hike, after closing July with a record 7.4%. The hedge acts as a containment dam for excess pesos in a market with increasing currency restrictionsa path that Massa has decided to deepen to avoid a devaluation.

“Good rates and a lot of pesosthe offer is very good, “said Santiago López, of Patente de Valores, referring to the liquidity of banks, investment funds and insurance companies.

For Martín Saud, from Balanz, “raising the rate contributes to the result, if you want to pay 60 and something you do not take a weight, it is good to know that you are willing to validate the rate that the market asks and not as before, that they wanted to put a rate maximum and force the machine “.

Despite the good result, analysts say the Treasury continues to require a high level of funding to stabilize the economy and comply with the IMF. Massa’s decision to put forward more tax restrictions and stop issuing the BCRA to cover expenses requires the placement of higher levels of debt to finance the 2.5% deficit in 2022.

“According to our estimates, the government needed to obtain $ 100,000 million in average net funding in the 10 bids remaining in the year to improve the pesos account. If in addition to that it manages to exceed that figure, the government also takes pressure off the central bank, which now has to absorb less pesos “, said Lucio Garay Méndez, of EcoGo.

The auction was important because maturities included securities held by foreign funds, such as PIMCOand the government was to prevent them from putting pressure on parallel dollars. The supply of short, inflation-adjusted bonds sought to satisfy that demand. Analysts also do not rule out the participation of the public sector.