Reserves: the Government bought more than US$800 million from the BCRA for debt payments

The Government bought at least US$836 million from the Central Bank last Wednesday. Although it had foreign currency available in its account, the Ministry of Economy decided to reinforce its holdings facing upcoming debt payments in dollars and, possibly, to begin to show guarantees of its future payment capacity in view of the July maturities with private bondholders.

The operation, not officially reported, was warned by City operators from increase in dollar deposits that the Treasury has in the BCRA in parallel with the fall of their deposits in pesos. This is clear from the spreadsheets published daily by the monetary authority, although with some lag wheels.

On January 14, the Government’s foreign currency account had US$2,651 million. The next day, That amount increased to US$3,487 million. That is, they increased by US$836 million (equivalent to $870,000 million). Meanwhile, in the same period, deposits in pesos fell by just over $1 billion, going from $5.73 billion to $4.69 billion.

How many dollars did the Treasury actually buy?

The difference in amounts between the peso account and the dollar account opens the question about whether the foreign currency purchase made during the day last Wednesday was actually higher than US$836 million, but part of the total acquired was used to pay maturities during the same round.

A report of Personal Investment Portfolio (PPI) put it this way: “Given that deposits in pesos fell by a greater magnitude than those in dollars increased (measured in pesos), the question remains as to whether the difference was used to meet operating expenses in pesos or if the deposits were purchased. dollars and a payment was made to an international organization (most likely). In this regard, There were maturities for around US$140 million with different multilateral organizations between January 15 and January 18”.

Debt maturities

The truth is that The external debt maturity schedule will be demanding this year. This is how January began: in addition to the payment of US$4,342 million to bondholders on the 9th, commitments of US$459 million are planned with international organizations (excluding the IMF), according to data from the Congressional Budget Office. Among them, the US$140 million mentioned by PPI are listed.

In February, also according to the OPC, the Government must pay some US$617 million to the IMF in interest, to which $216 million will be added to other multilateral and bilateral organizations.

A report from Banco Provincia reviewed the challenges of this year’s commitments: “In 2025, the expirations The rest of the Public Sector are more demanding: US$9,000 million from the National State, US$4,000 million from the Central Bank and US$2,500 million from the provinces. For their part, companies should cancel around US$5 billion this year. In total they exceed US$20,000 million.”

While the economic team deepens the path of exchange rate appreciation, the external front promises to be challenging given other factors that add up, such as the fall in commodity prices and the possible strengthening of the dollar in the world driven by Donald Trump’s protectionism.

Although one of the keys to finally elucidating how the year is configured in this matter is the negotiation with the IMF. The Government seeks to add extra debt (over the US$45,000 million that Mauricio Macri took in 2018) to reinforce reserves and get closer to lifting the stocks. Signs after Sunday’s meeting suggest that with Trump’s arrival, completion of the agreement could accelerate. However, the keys will be the amount of fresh funds it includes, what the disbursement scheme will be, what the intended uses for that money will be and what conditions it will include, especially in terms of dollar administration.