There is speculation in the market that the government will sooner or later come out to offer the banks a new debt swapwhich would be between $10 and $11 billion. These are the bonds that were left without put coveragewhich expire within two years, which have as counterpart fixed-term deposits averaging 35 days.
“After having eliminated a significant amount of puts (78% of American options) we believe that the banking sector could make changes to its asset portfolio,” explained Portfolio Personal Investments (PPI) in a report.The stock exchange company adds that “since Banks own approximately 50% of the peso-denominated debt issued by the Treasury, There is no market depth that supports a generalized adaptation of portfolios.”
“We believe that the Treasury will eventually offer aanje focused on the securities in hand of the banking sector (without puts) so that they can make adjustments in their portfolios without collapsing the sovereign curves in pesos,” PPI points out.
In other words, financial institutions that now hold government bonds without the liquidity guarantee they had contracted with the BCRA would have to be prevented from doing so. come out onto the market to get rid of these securities. Their value would plummet.
According to financial analyst Christian Buteler, “There is a mismatch between the maturity of the bonds and people’s deposits, which are not covered.”
For example, he indicated that if a bank needed liquidity tomorrow, it would notor would have the option to request rediscounts from the Central Bank. Buteler believes that the way to resolve this would be with a trade. “There are bonds that adjust for CER (inflation) that mature between 2026 and 2027 that would have to be exchanged for something shorter,” he said.
Until now, as banks took money from the public for periods of up to 35 days on average, lThe liquidity letters, first, and then the transfers, offered short terms that fit the period of the deposits.
Buteler believes that the government could offer banks the new Liquidity Fiscal Letters (LEFI) although these have a term of one year. If in this case the bank needed liquidity, it would have to sell the Lefi to the BCRA and the latter would have to record it in its assets until July 17, 2025, when the Treasury pays it the capital plus the capitalized interest.
According to Buteler, The LEFI will be generating an additional expense of about $520,000 million per month, which is currently impossible for the National Treasury to meet.l with the level of surplus it has. This is due to the interest it pays in the order of 4%, which is capitalized and paid at the end of the bond’s life.
For this reason, it is understood that although The Central Bank will stop “issuing” money by not paying more interest on remunerated liabilities, The National Treasury will be doing itwhich at the end of the journey, if it does not have a sufficient fiscal surplus, will have to “roll over” this new debt in July of next year, or it would have to ask the BCRA for monetary assistance. According to Buteler, The Government “has resolved the registration” of the fundsbut not the surplus stock of pesos.
Source: Ambito
