Criticism of Together for Change
“The legislative blocks of Together for Change warn about the serious risks involved in the debt swap being prepared by the Ministry of Economy,” says the document released by JxC.
He then explains that “The aforementioned exchange will give banks an option that no investor has: a “dual bond” adjustable for devaluation or inflation -the largest- and the possibility of selling all the securities to the Central Bank at any time (“the put”) “.
In this regard, the text indicates that “this would imply ‘exchange insurance’ for bondholders (banks) and that the local debt that matured every 3 months now, in practice, has daily maturities. All of this extended until 2024.”
“This action will pose a huge risk for Argentines since it could lead to an inflationary jump even greater than that already produced by this government, in addition to generating serious problems for present and future economic management,” interpreted the Cambiemite legislators.
Finally, the document states: “Additionally, this interference constitutes a violation of the principles of the Financial Administration Law and the BCRA’s own Organic Charter.”
meeting with banks
This Monday, at noon, Sergio Massa and his team will hold a meeting with representatives of different banks and insurers in search of closing an agreement.
Argentina’s sovereign debt traded higher on Friday in anticipation of an expected new bond swap being analyzed by the government, traders said. with the idea of rescheduling maturities and clearing up doubts of a possible default in an election year.
Argentines will go to the polls in the second semester to elect president, amid a contraction of the economy, a fall in central bank (BCRA) reserves and an inflation forecast of 100% in 2023.
“The economic team continues to advance in the negotiation for the exchange of titles with the banks, although the obstacle would be found in how to implement the rescue mechanism,” reported the SBS Group based on press reports.
The Ministry of Economy did not confirm the information, although bank sources acknowledged to Reuters that work is being done on the matter. The Government has made two exchanges since Sergio Massa took over the Economy portfolio, last August.
Source: Ambito
