The Ministry of Economy began this Wednesday the process aimed at transferring debt from the Central Bank to the Treasury. In the first debt tender in pesos after the entity’s announcement that it will not issue more Leliq and along with it a sharp drop in the reference rate, the Treasury managed to place $2.9 billion.
At the same time, the Treasury Palace announced that is going to buy back Treasury debt from the Central Bank that the entity led by Santiago Bausili has in its portfolio, with pesos that the BCRA will absorb. In principle, it is $950,000 million at the face value of a BOCON maturing in 2033 and $1.9 trillion at the face value of a Dual bond that matures in February.
Its about first call that the Secretary of Finance, Pablo Quirno, faces. Strictly speaking, in December there were only about $200,000 million in maturities remaining and the majority was in the hands of state agencies themselves. It was then expected that the demand for the day was genuine.
Quirno specified through social networks that ““With the pesos resulting from this tender, an offer to repurchase the National Treasury debt in the BCRA portfolio will be made.”. According to the latest weekly balance sheets of the monetary entity, the holding had already exceeded 25% of its assets this year. The accumulation of Treasury debt is due to intervention throughout this year in secondary markets to maintain prices.
The result was successful from the Government’s point of view. In this call, Discount Treasury Bills were again made available (LEDES), that is, fixed rate instruments. In that case, $2 billion was awarded. who completed the total offer for this call. For that reason, there will be no second round for entities that are part of the group of market makers. The LEDES maturing on January 18 came out at a cut-off price of $927 and with a monthly effective rate of 8.66%.
The Economist Salvador Vitelli, from Romano Group indicated that “the Annual Effective Rate validated with the Lede S18E4 is barely 233 basis points above the last tender where a fixed rate instrument was offered (Lelite in October)”. “If we go to the last Lede (August), it is 2,175 basis points above. All this with the completely different inflation scenario,” she said.
Furthermore, the Treasury managed to place $893,000 million in BONCER (indexed to inflation) maturing on February 14, 2025, with a cut-off value of $2,682.50 and a negative interest rate of 15.95%which indicates that investors are paying a very high price to hedge against long-term inflation.
On the other hand, they were awarded $71,000 million in a BONCER maturing in November 2026. The cut-off value was $8,550 and the rate is negative at 4.53%.
In the market it is stated that to the extent that the Central Bank manages to sustain the value of the dollar at the current price of $800, the scenario is set for dollars to enter for carry trade operations.. They maintain that it gives the impression that the Government wants to encourage this, at least for a moment, to add a supply of foreign currency and, thus, help contain the value until the produce from the harvest arrives in April.
On the other hand, it was foreseeable that there would be a high demand for securities based on the fact that the Central Bank is closing the door to the banks so that they go to Leliq and passes, because the rate offered in that case is 110% nominal annual, well below inflation.
Source: Ambito
