Repo credits: what will be Massa’s announcements
These days, the exchange front occupies a large part of the man-hours of the economic team. Not only to meet the ambitious reserve accumulation target scheduled at US$4,000 for this year with the Monetary Fund, but mainly because it is a fundamental condition to travel the path of “stability” that the Government is aiming for. Also because adding currencies is the only way to achieve “the third consecutive year” of recovery in activity.
With this scenario, in the next few days Massa will announce a type loan Repo, by international banks with bonds as collateralwhich will exceed US$1,000 million. According to official sources, the “rate will be below 10%”. Although this type of instrument is usually used for short-term financing, up to now the extent of the credit is unknown.
“This week progress will continue,” they commented to Ámbito from the Palacio de Hacienda when asked when the initiative will be formalized. In the market they speculate with the idea that part of these currencies could be used to accelerate the repurchase of debt. As this medium was able to learn from one of the participants, on Monday at dinner with President Alberto Fernández at Quinta de Olivos, in which Buenos Aires mayors also participated, Massa anticipated that “he will face a large process of deleveraging Argentina”.
In the same scenario, the Minister of Economy explained that he will also focus efforts on “stabilize financial dollars” because “they have an important role in increasing prices.” In this line, he maintained that “the fight against inflation is key to the recovery of income” and recognized that “the excess pesos of 2020, 2021 and 2022, threatens the definitive stabilization.”
Outside of the Repo, the Government has been negotiating extra financing with an important Sovereign Fund of Investments that has in its portfolio a series of infrastructure projects to stimulate strategic sectors. The expectation is that progress can be made and disbursements achieved during this year.
key tender
For the situation that the exchange rate is going through, everything adds up. Therefore, the field of action to search for foreign currency exceeds the economic cabinet. So much so, that another relief could come from the National Communications Entity (ENACOM)which is accelerating the bidding for spectrum compatible with 5G technology. These are “three blocks of 100 MHz in the medium band”, according to sources familiar with the process.
In this way, close to US$1,500 million could be added in a first stage according to official estimates. In Massa’s environment they believe that the funds will arrive in the first semester. The geopolitical dispute between the United States and China would be settled with an intermediate result, which would allow both Wi Fi 6 and the technology promoted by the Asian firm Huawei to operate.
energy saving
Last Friday, in a conference he held together with Royón, Massa announced that due to a series of negotiations and variations in international prices, Argentina will save some US$2.1 billion in energy imports with respect to the provisions of the Budget Law.
In this sense, through a statement, the Government explained that “for 2023, the originally budgeted expenses for LNG imports were US$3,465 million, at a value of US$55 per million BTUs. However, the impact of the volatility of the international LNG price opened a window of opportunity”. Therefore, it was decided to anticipate the purchase: “This allowed the price to be lowered to US$20.8 per million BTU through a bidding process with the participation of nine international companies,” the text says.
The Ministry of Economy points out that the initiative will also generate “fiscal savings of more than $500,000 million” and that additional relief will be added in July by the Néstor Kirchner gas pipeline.
Source: Ambito
