It is a bond in pesos tied to the variation of the dollar (dollar-linked), with a 13-month term. In this way, the Ministry of Economy obtained 60 percent of the funds that it will need this month to fulfill different obligations.
The Ministry of Economy today placed a bond in pesos tied to the variation of the dollar (dollar-linked), with a 13-month term. In this way, it obtained 60 percent of the funds it will need this month to meet various obligations.
The amount in pesos is equivalent to US $ 1,766 million, which exceeded the initial offer planned by US $ 500 million and allowed to cover more than 60% of the financing needs of the Treasury for October.
The tender is part of the Treasury debt refinancing scheme in pesos, but also of the package of measures announced last week by the Government to give new coverage options to the export sector, as an incentive to accelerate the settlement of dollars and decompress the pressure on Central Bank reserves.
In this regard, the Ministry of Economy reported that the amount subscribed in today's tender reached $ 136,105 million and that they allow “planning the coverage of the nearly $ 225,000 million that expire throughout October , of which about $ 166,000 million correspond to amortization and interest payments of different market instruments ”.
The portfolio led by Martín Guzmán stressed in a statement that the offers received totaled an amount equivalent to US $ 1,768 million of nominal value, of which US $ 1,766 million were awarded, with an interest rate of 0.10% per year , for below the maximum of 0.25% established in the call for bids.
Likewise, he pointed out that the placement of this “dollar linked” bond generates “a retraction of the monetary base in the short term and an adequate management of the liquidity of the Treasury accounts based on the financial programming of the month”.
He also emphasized that with this operation “the financing options of the National Treasury are broadened, the degree of monetary assistance decreases at the same time that it seeks to collaborate in the stabilization and coordination of the expectations of the different economic agents.”
Last week, the Government announced a series of measures to encourage the entry of dollars to the country, among them the reduction of withholdings for agriculture, industry and mining, in order to alleviate the situation of the exchange market where, in the In recent weeks, the Central Bank has become almost the only supplier of foreign currency.
Since mid-June, the Central has accumulated net sales in the foreign exchange market of about US $ 3,550 million , while international reserves ended yesterday at US $ 41,172 million , almost US $ 2,000 million below the level they had three months ago and means, medium.
“We need to generate strengths, seeking to accumulate reserves . Stabilizing the economy is a process, we must go at the appropriate speed,” said Guzmán when presenting the package of measures days ago, which included the increase in reimbursements for exports with greater value aggregate and stimuli for the real estate and construction sectors.
For the director of the consulting firm Ecolatina, Lorenzo Sigaut Gravina, today's tender “is a positive sign ” since the Treasury “obtained financing in pesos for more than triple what it expected” and “although it is a title that has its risk because it is tied to the exchange rate, increases the chances that there will be net placements by the Treasury and reduces the need to issue pesos to cover the deficit. “
In that sense, he pointed out that the Central Bank needs to stop selling dollars and “stop the drain on reserves”, so “it is good that it has to issue less pesos”
“The idea of this instrument is that there is less exchange pressure, either by stopping the monetary issue or offering hedging alternatives for exporters or savers other than the MEP or CCL dollar,” said the director of Ecolatina in dialogue with Télam.
Financial analyst Christian Buteler assured that “today there are surplus pesos and instruments are lacking, so any instrument that allows hedging against the exchange rate will be well received by the market.” However, he analyzed that “the situation on the dollar will not change .”
“That says the value of the CCL that today closed above $ 152 per dollar. People continue to cover themselves by paying values that are high. But there is no other alternative due to the high level of uncertainty, ” Buteler told Télam.
At the same time, a report by the rating agency Moody's indicated that Argentina's credit risks “remain high” given the deepening of the economic crisis that began in 2018 and that “it will probably continue to affect different sectors.”
“However, we do not forecast further losses (in the value of the bonds) beyond the 35% -65% range associated with Argentina's Ca sovereign rating,” said Gersan Zurita, senior vice president of Moody's.