The Government will order public bodies to exchange their bonds in dollars under foreign law (global or GD) for instruments in pesos under local legislation. The total amount covers about US$4,000 million. In addition, it will proceed with the incorporation of dollar bonds under local law (bonares or AL) in the CCL dollar operation. One by one, the measures that will be implemented to stabilize the economy.
The measure seeks to give greater depth to the market with which the CCL dollar is operated -which is currently enabled exclusively for GD29, GD30, GD35 and the rest of the global series- and, at the same time, provide instruments to the Treasure and to central bank to act in the financial exchange market.
Currently, the Government cannot act on the CCL dollar price with dollars from the reserves -it was expressly prohibited in the last revision of the agreement with the IMF- and could only do so with its holdings of bonds under foreign law, which was a minor portion of the securities in your portfolio.
From now on, the Ministry of Economy will be able to dispose of close to US$35,000 million in nominal titles under local law -AL29, AL30, AL35 and the rest of the series of bonaers- that the entire national State has to serve as offer in the financial dollar market and, thus, reduce volatility without affecting reserves.
The objective is to control the volatility of the macroeconomy and thus bring calm to the markets.
One by one the measures that the Ministry of Economy will implement
– Order public organizations to enter the exchange with their bonds in dollars under foreign legislation (global or GD)
– Incorporate bonds in dollars under local law (bonares or AL) in the CCL dollar operation to generate depth in the market
– The Ministry of Economy, in coordination with the BCRA, will concentrate the management of the rest of the ALs that were not placed on the market
– Withdraw GD bonds from the market
What is expected to be achieved?
One of the central points of the measures is to reduce the volatility of the financial dollar market, but it is also expected to absorb the surplus of pesos that can put pressure on inflation, whose index showed 6.6% in February.
On the other hand, both the BCRA and the Ministry of Economy will provide new instruments to act in the financial dollar market, without affecting the volume of international reserves.
In addition, it will make it possible to concentrate said instruments in the hands of the Ministry of Economy, in coordination with the BCRA, with which they will no longer be disseminated in the portfolios of public bodies.
The measures will be detailed tomorrow at the working breakfast that Minister Sergio Massa and members of his cabinet will have with bank representativesmutual funds, insurance companies and stock exchange companies (alycs).
The new regulations will include resolutions from the Central Bank, the National Securities Commission (CNV) and the National Insurance Superintendence.
Source: Ambito
