He Central Bank (BCRA) on Thursday awarded $190,810 million (about US$534.3 million) in Liquidity Letters (Leliq) with a stable rate of 133% nominal annual rate (TNA) and City analysts warned of a notorious shortage of renewals given that a few $1.82 billion this Thursday, so about 10% was relocated of the total offered.
Thus, the trend that had begun this Tuesday is confirmed, after the presidential elections were held in which Javier Milei beat Sergio Massa in the runoff. That day, the BCRA had tried to place about $2.7 billion and only achieved 40% acceptance (around $1.8 billion).
Analysts point out that what is happening is a migration of banks towards shorter-term instruments, such as repos (one-day Leliq) from the BCRA. While the volume of those with 28 days is falling, the shorter ones are growing in an inversely proportional manner.
Currently, the participation of the Leliq and the repos in the balance of the BCRA is around $14 billion (more than US$40,000 million)a very high level, especially with respect to the current volume of Bookingswhich is about US$21,167 million (so it doubles them).
“The banks They decided not to renew a large part of the Leliq longer to 28 days and go to the passive passes one day because they are waiting for what is going to happen with the monetary politics of the new government and these instruments pay less interest, but have greater liquidity,” details the economist Federico Cyrulnik, economist Scalabrini Ortiz Center for Economic and Social Studies (CESO).
It clarifies that, in the immediate future, the change from Leliqs to Passes has no effect, except that the BCRA will pay less interest on that mass of pesos. “The worrying thing is that the greater liquidity that the passes guarantee them suggests that, in the event of any development, they will be able to act more quickly and not be stuck for 28 days,” he points out.
Thus, forward, the economist Federico Glustein indicates to Ambit that, “now, we have to see where the Leliq are derived” and warns that, “if we go to an external debt scheme, it will be very different than if they go to a collection instance and go back to the economy, without sterilization”. In the latter case, it would be a worrying fact because he anticipates that “it would imply a strong inflationary trend”, although, if this is sterilized with long-term debt, the problem of eventual inflation will be later.
The truth is that the elected president “Javier Milei anticipated that is putting together some type of engineering to change or make some type of exchange with the Leliqs“, as the economist Gabriel Caamaño points out. However, he clarifies that it is still not clear what they want to do and how. What happens is that, for the future Argentine president, it is an unavoidable condition to get out of the trap to dismantle the famous “Leliqs ball”, which is why he anticipated that it will be his first step as a Government to move forward in that direction.
Source: Ambito
