Following the government’s successful debt tender on Tuesday, the Ministry of the Economy will send a tax signal to the market and cancel $100 billion of its debt to the Central Bank (BCRA) for Transitional Advances.
“The monetary assistance provided by BCRA under the pandemic will be reduced, moving towards a financing composition consistent with the objectives of convergence and macroeconomic stability,” Martin Guzmán said.
On Tuesday, letters and bonds were placed in pesos that grabbed investor attention. Through fixed-rate securities (discount), badlar rate (for fixed terms greater than $1 million), adjustable by the Benchmark Stabilization Coefficient (CER) and a bond linked to the evolution of the official dollar due in April 2022, the Treasury achieved an effective amount equivalent to $254,671 million. Thus, the government will be able to cancel the $108.7 billion it must pay this week for debt maturities. According to the official statement from Economía, during October the Ministry of Finance raised funds of $420,583 million, resulting in positive net financing of approximately $250 billion, representing a roll-over ratio of 246%, the highest of the year.
From this positive balance, the economic cabinet made the decision to shrink its liabilities with the monetary authority, amid the questions it has been receiving over the high fiscal deficit, financed mainly by monetary issuance, which causes additional pressure on the foreign exchange market.
In this note: