It issued short-term Bills to avoid the injection of currency and to pay or end up passing on to investors. Test is coming for debt in dollars
The government managed to get around another “liability management” operation with the tender of debt in pesos. On this occasion, the Ministry of Finance in charge of Diego Bastourre It obtained almost $ 14,000 million in the local market in its strategy of “rolling” the largest number of maturities and acquiring pesos to pay for the large fiscal and financial needs in the midst of the pandemic of the coronavirus.
Specifically, Economía carried out the reopening of Discount Letters with maturity in July 2020 and a reopening of Lebad (S28G0) with maturity in August of the same year. Through the first, it raised $ 1,364 million and paid 34.5% and for the second, $ 12,596 million with a yield of 38.8%.
This operation comes after the “success” in the debt swap in pesos last week when it managed to refinance around 50% of the maturities (they were around $ 250,000 million).
“The government clearly continues with the strategy of renewing the maturities corresponding to the debt in pesos with new issues and / or swaps. In a framework where the monetary issue is increased by the needs generated by the crisis of the coronavirus, the government seeks to avoid issuance for these payments“, maintains Personal Investment Portfolio (PPI).
The financial company recalls that, after all, in the remainder of the month the government had to face maturities in local currency. A few days ago the Bopomo (TJ20) and next week other payments of letters fall (Lecer, Lecap and Lelink).
The idea of the economic team is to continue carrying out liability management operations in pesos to counter the strong monetary issue that is coming. The central bank in charge of Miguel Pesce He has already warned that he will come to the rescue of the Treasury to finance higher social spending during the crisis.
While the BCRA says it shouldn’t go at prices, everyone knows (even Martín Guzmán) that this is not true and that an issue of pesos without greater demand will end in inflation or the parallel market of dollar.
It is the fear of the Minister of Economy: that inflation will spiral and end at unmanageable levels. There are already some consultants from the city of Buenos Aires that see a CPI of 60% or more at the end of 2020 due to the battery of expansive measures that the Government will have to launch before the pandemic (and the strong recession that the Argentine economy is experiencing).
Outside they agree. The JP Morgan believes that the pressure to finance the primary fiscal deficit by issuing money amid declining real demand, plus the lack of a monetary anchor, could put Argentina on the brink of hyperinflation as early as the first half of 2021.
Prognostic forecast or not, Economy knows that not only are there no dollars for the debt and that is why it will restructure or default, but there are no pesos for the bondholders either. Either they take other instruments or they will go to direct re-profiling.
Next week there will be another test for Guzmán: next Tuesday he cuts coupons for PARA and PARY for a total amount of around $ 120 million. Everything would indicate that they are paid (since interest was being done that). The issue is how long to raffle dollars.
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