The Government will order public bodies through a decree to dispose of their holdings of bonds in dollars to contain the pressures on financial dollars and absorb pesos. Senior official sources told Ámbito that a double measure will be formalized in the next few hours, which will include a pesification of part of those titles through swaps, a reduction of US$4,000 million in the debt stock under foreign law and a supply injection in cash with liquidation through bond auctions under local law.
This Wednesday morning, the Ministry of Economy will receive banks, insurers and brokerage firms (Alycs) to detail the measure and induce them to give depth to the financial exchange market to try to guarantee the result of the initiative.
On the one hand, the Ministry of Economy will entrust to public bodies exchange their Global bonds (Foreign Law) for titles in pesos. Once the conversion is completed, the Government will proceed to remove those titles in dollars from the list. Total, aim to reduce the stock of Global titles by US$4,000 millionwhich in the Palacio de Hacienda they hope will help improve their price.
On the other hand, it will order national public entities Sell your securities in dollars under local law (Bonars) in the spot market with settlement (CCL) through auctions, whose schedule and amount will be determined by the Ministry of Economy. Together, the bonds in question add up to about US$35 billion.
So, aim to add offer to the CCL to contain its price: Initially, the idea is to stabilize it in the face of an election year of foreseeable dollarization pressures. The decree will be accompanied by resolutions from the Central Bank, the National Securities Commission and the National Insurance Superintendence to remove the restrictions that some institutional investors have to buy CCL through Bonares.
This will generate a transfer of debt in foreign currency that is currently in the hands of public organizations to the private sector. And in parallel, it will allow absorb weights to “avoid putting pressure on inflation and improve public sector financing,” they stated in Economy.
“With the exchange, this week’s tender and this measure (plus the margin of transitory advances allowed by the IMF) Treasury financing is cleared. It stopped being a problem that generates stress. The drought plus the international situation focuses more attention on the financial exchange market. That is why we anticipate this measure,” explained a senior official source.
The only ones that will be exempt from parting with their holdings will be the Treasury and the Central Bankwhich will keep them as a reserve to intervene in financial dollars in the event that market pressures increase in the run-up to the elections.
The meeting this Wednesday with banks, insurers and Alycs will serve to make them aware of the new rule and to encourage them to participate as buyers in the Bonares auctions through the CCL to “give depth to the operation.” In total, when the process is finished, which could take a long time, they expect to absorb some $2 trillion in this way.
Sources from the economic team confirmed to Ámbito that the measure was discussed in recent negotiations with the International Monetary Fund. In addition, they highlighted that it is contemplated in the agreement reached by the delegation headed by Deputy Minister Gabriel Rubinstein with the technical staff of the organization in the framework of the fourth review of the Extended Facilities program, which the board would approve at the end of the month.
One of the factors that led to Sergio Massa This measure was defined by the recent rise in the parallel dollars and the foreseeable extra pressures that the electoral context could generate in the coming months. In particular, they pointed out that the increase in the gap registered in January contributed to boosting the inflation index, together with other elements.