This week the Central Bank of Uruguay (BCU) issued three bills of monetary regulation (LRM) for just over 10,880 million pesosa 20% more than expected (9,100 million pesos). But the most outstanding were the offers from the agents, who made proposals for a total of 16,000 million pesos, a 175% more.
Last week, the amounts accepted had been 13.8% less than programmed by the monetary authority, so the recent numbers published by the Electronic Stock Exchange of Uruguay SA (Bevsa) show a jump in investor interest. in the last days.
Last monday may 15as provided for in the tentative placement schedule, the BCU awarded 3,791 million pesos in a title with a term of 36 days, expiration date next June 20 and a cut-off rate of 11.2%. The amount to be tendered was 3,300 million pesos and offers were submitted for 6,291 million pesos, a 90% more.
Two days later, the Wednesday 17, The market reaction to the second title, with a term of 84 days and maturity on August 9 of this year, was similar. Compared to the 2,500 million pesos offered, 3,884 million pesos were proposed (55% more) and, finally, the entity ended up accepting 2,912 million of pesos, 16.5% higher than expected than the initial amount to be bid. The cut rate was 11.35%.
Lastly today Friday fifteen, the interest on the instrument in pesos with a term of 364 days and maturity on May 17, 2024 was maintained. Given the 3,300 million pesos offered, they were awarded 4,177 million pesos (almost 27% more), although the offers were considerably higher: 5,827 million pesos, almost a 77% above. In this case, the cut rate was even lower than in the rest: 11.14%.
The BCU and the MEF had already highlighted this “appetite” of investors for instruments in pesos a month ago, during the evaluation of the results of the different placements of titles in local currency. This was already, at that time, a positive sign in the face of the warning of the International Monetary Fund (IMF) regarding the “historically high levels” of indebtedness relative to the Gross Domestic Product (GDP).
The government placed double what was offered in the Treasury Note auction in UP
Another sign of this was the tender for a Treasury Note in Pension Units (UP) —Series 3— with a maturity of 21 years, on May 13, 2040 this week, where the Ministry of Economy and Finance (MEF) awarded 2,131 million pesos —83 million dollars—, with the aim of continuing to fund itself with debt instruments in pesos.
The amount to bid stipulated by the Public Debt Management Unit (UGD) It was 1,100 million UP —approximately 1,052 million pesos or 41 million dollars, at today’s value. However, investor demand more than double what was offered: 2,565 million UP —equivalent to 2,336 million pesos or 91 million dollars, according to the price of the Central Bank of Uruguay (BCU).
Finally, the government ended up awarding 2,200 million UP —2,131 million pesos or 83 million dollars—, while the State has within its powers to end up awarding up to twice the amount auctioned. On this occasion, the characteristic that has made it possible to exceed the expectations of previous tenders, operated as a limitation for the coverage of the entire demand.
Source: Ambito
