The data of the last hours is that Minister Luis Caputo plans to use an additional resource: the emission of bonds in pesos that will be signed in dollars, a measure that complements the pre -announced “permanent whitish”. The reading they do is as follows: that issuance would enable the government not to make the expected currency purchases within the exchange band (in the $ 1,000 area) and, at the same time, add reservations in the Central Bank, necessary to meet the goals established with the IMF. They think of the Palace of Finance that, in this way, could capture dollars of foreign funds and local banks, preserving monetary stability and the target of disinflation.
This is also understood what happened in recent days, through A deep and active intervention in the future dollar marketwhere the government has drastically reduced implicit rates, encouraging the “carry trade” and enhancing the attractiveness of the bonds, which could perform about 30% per year.
For example, last Wednesday, the volume operated in the Rofex reached a record of US $ 4,240 millionthe largest in three years, with December contracts negotiating US $ 650 million in a single day, compared to US $ 10 million of the previous day. This operation, attributed to the BCRA, dropped the implicit rates of contracts to levels of 15%-22%per year, well below the rates in pesos of instruments such as LECAP or BANCAP, which are around 35%-40%.
The urgency of accumulating more than US $ 4,000 million in reservations in the coming weeks, To meet IMF goalsand to cover debt maturities for US $ 4,500 million in July, drives this strategy. As mentioned, in government analysis, bonds in pesos will allow treasure to channel currencies directly to the BCRA, without intervening in the market -free market or emitting weights that may press inflation.
The bonds in pesos, even in the design phase, could adopt a format similar to the “Linked dollar” or “Linked peso”, with adjustment by official exchange rate, or replicate the 2018-2019 dollars. With expected rates close to 30% per year, they would exceed the implicit rates of futures, making the combination of both instruments attractive for banks and investment funds.
The recent flexibility, which reduces the minimum period of permanence for foreign funds to six months, together with the stability of the wholesale dollar in $ 1,136, reinforces interest in these bonds. “The BCRA is creating an environment where dollars flow to the systemtaking advantage of the gap between the fees in pesos and those of the futures, ”explained a City operator. The fall of the parallel and financial dollar, with the MEP at $ 1,156 and the one with the counting of liquidation in $ 1,165, reflects the impact of these measures.
How the Minister Luis Caputo thinks the dollar strategy
Future intervention has a clear objective: by selling contracts at low rates, the BCRA discourages bets for a devaluation and reinforces the stability of the exchange rate, bringing it closer to the band’s floor ($ 1,000). Analysts of the 1816 consultant pointed out that this operation, with an increase in open interest of almost US $869 million in a single day, is “compatible with an official intervention” that even hit the spot market, taking the wholesale dollar to $ 1,124, a setback of $ 70 in one day. “The BCRA is exploiting all the tools so that the exchange rate does not move away from the band of the band, encouraging investors to sell dollars and position themselves in pesos,” said Emanuel Álvarez Agis, from PXQ. This dynamic favors the “Carry Trade”, where investors sell dollars to invest in assets in pesos with high rates, waiting for the exchange rate to remain stable.
The macroeconomic context supports the strategy. The country risk has descended below 700 basic points, and sovereign bonds, such as the Global 2029, recorded increases that could continue this week. However, capital laundering generates doubts of diverse nature, and still fails to capture the necessary enthusiasm to underpin the intention of the government to meet the IMF, which will make bonds and intervention in future key tools.
The bonds point to banks with excess liquidity in foreign exchange and foreign funds, which Come in the “Carry Trade” a profitability opportunity In a stabilized dollar scenario. Some operators even suggest that the BCRA is providing coverage to foreign funds and private banks that issue negotiable obligations (ON), then liquidating them abroad, which facilitates the entry of dollars. “It is a sophisticated operation to attract capital without destabilizing the market,” said a financial analyst.
Inflation, exchange jump and rise in country risk, associated risks
However, the risks are considerable. Remunerated bonds imply a greater fiscal cost than issuing pesos without interest, which could stress the fiscal surplus if the uptake is not significant. In the City they comment that The Treasury will face interest payments or exchange adjustments that require a massive placement to be viable, and that the intervention in futures, although effective to contain the exchange rate, also generates risks: if devaluation expectations resurface, the BCRA could face losses by liquidating contracts sold at low rates, which would force to absorb weights through instruments such as Leliq, complicating monetary policy. In addition, the perception that the BCRA depends on these maneuvers to accumulate reserves could generate skepticism, especially if the exchange rate is not stabilized near the band’s floor.
The history of similar instruments feeds caution. The 2018-2019 Letes, which ended up restructured or heavy, are a reminder of the challenges of these operations. To mitigate this risk, the government plans to offer repayment guarantees and a design focused on institutional investors.
In the market they argue that the exchange stability, with the parallel dollar under control and an exchange gap in minimums, offers a favorable environment, but the credibility of the program will be decisive. “The market needs certain that the government can sustain fiscal balance and accumulate reservations without resorting to emergency measures,” said a stock market operator.
Source: Ambito
