The increase in the rate negatively impacts the complex dynamics of the BCRA’s quasi-fiscal debt and makes the monthly interest that must be paid on the debt more expensive, which analysts already estimate at $2.38 trillion per month.
The BCRA raised the monetary policy rate to 133% after September inflation data and makes the monthly interest of the Leliq more expensive.
The critic 12.7% of inflation of September that the INDEC announced last week was above market expectations and is the highest monthly variation since 1991. Thus, inflation accumulated a 138% increase in the last twelve months. Inflationary acceleration is marked led the Central Bank to raise the monetary policy rate for the sixth time in the year. This time, it raised it by 15 percentage points in order to avoid a further delay in yields in pesos to contain disarmaments, react to the rise in prices and ease the pressure on parallel dollars. However, The increase in the rate negatively impacts the complex dynamics of the BCRA quasi-fiscal debt and increases the monthly interest that must be paid on the debt, that Analysts already estimate it at $2.38 billion per month.
The entity chaired by Miguel Pesce The reference rate (that of the 28-day Leliq) increased to 133% nominal annual rate, which is equivalent to an annual effective rate of 254.8% and a monthly rate of 11.1%. This measure, of course, impacts the evolution of the Central’s remunerated liabilities, which took center stage in the first presidential debate when Leliq (liquidity bills) were mentioned. These are debt securities issued by the BCRA to remove pesos from circulation. These instruments are only available to banks that place money at the fixed rate and, thus, leverage the remuneration of their clients’ fixed terms.
The financial analyst Salvador Vitelli pointed out that currently “the amount of remunerated liabilities is $21.7 billion, distributed in $14.8 billion in Leliq and Notaliq, and $6.9 billion between passes and Lebaq.” And he added: “With respect to the product, it is around 11%. The monthly issuance amount required for the payment of interest is $2.38 billion one month ahead, since as the amount accrues, the amount increases.”
This dynamic has been representing a problem given the exponential growth of these titles. The stock of remunerated debt of the Central Bank has doubled so far this year, going from $10.6 billion in January to $21.7 billion today.. The main driver of the growth of the Central debt in recent months was the payment of its interests. The broadcast that required the intervention of the BCRA to support the curve of peso securities tendered by the Treasury and, previously, that derived from the first editions of the program known as the soy dollar.
In this line, Vitelli He noted: “The growth lately is due to the increase in interest rates and the sterilization of the BCRA in its monetary policy. Also, in the face of the debt crisis in pesos, we saw the BCRA quite active in the peso curve and that ultimately ends up being absorbed via remunerated liabilities.”
For its part, Rodrigo Benitez, chief economist of MegaQM, He pointed out that “remunerated liabilities have been growing nominally, but they have not increased in relation to GDP.” In this regard, he explained: “The main source of expansion is the interest rate they earn, but since it has been lower than inflation, the stock grows nominally, but not in real terms. Both the financing of the Treasury and the intervention of the BCRA in the debt market in pesos imply issuance, but it is less than what is issued for the interest on remunerated liabilities. In any case, the previous point is key, that the interest rate is lower than inflation and therefore they do not grow in real terms.”
Source: Ambito
