He Central Bank of Uruguay (BCU) This week, it will place three domestic public debt securities with different maturities, for 15.7 million pesos.
He Monday 29at 2:00 p.m., the first title in pesos will be tendered for 6.6 billion pesos (almost 169.36 million dollars) with a term 35 days, with an expiration date of Monday, March 4 of the current year. In that total, 1,320 million pesos (almost 33.87 million dollars) will be non-competitive placements and will have their integration date on the same day.
On Wednesday the 31st at 2:00 p.m., a title in pesos for 5,800 million pesos (a total of 148.83 million dollars) will be awarded with a term of 98 days, and an expiration date of May 5 of this year. . He himself will have the integration date The same day. This tender will have 1,160 million pesos (29.77 million dollars) of non-competitive placements.
Finally, on Friday, February 2 at 2:00 p.m., the last title in pesos of the week will be auctioned, for others 3300 million pesos (almost 84.68 million dollars) with a term of 182 days, and an expiration date of August 2 of this year. Of the total, 660 million pesos (almost 16.94 million dollars) will be non-competitive placements. Meanwhile, the integration date will be the same day.
Last year sovereign debt reached its all-time high
The percentage of debt in local currency in the total debt of the State of Uruguay reached the all-time high of 55.9% in December of last year, in line with the debt management strategy carried out by the Ministry of Economy and Finance (MEF).
The Debt Management Unit (UGD) of the MEF published the Sovereign Debt Reportwhich contains encouraging and historic data for the country: the percentage of debt in local currency reached 55.9%, the highest level recorded so far, driven by a greater financing in pesos both in the domestic and international markets; as well as the effect of relative prices.
As indicated by the UGD in the quarterly report corresponding to November and published at the beginning of December of last year, the government “continued to take significant steps in the dedollarization of the debt structure, reducing vulnerability to volatility of the currency.”
These results are framed within the debt management strategy that the MEF has been carrying out as a pillar of the debt policy, through the special issuance of domestic debt in the form of Treasury Notes in Indexed Units (UI)in nominal pesos (UYU) and in Previsional Units (UP).
In turn, it is part of the recommendations that the board of directors of the International Monetary Fund (IMF) made for the country in its annual evaluation, in terms of moving more quickly towards the de-dollarization of the economy.
After the 2022 crisis, the percentage of debt in local currency did not reach 20%, and it remained this way until 2007, when this proportion remained slightly below 30%. In 2012, 2013, 2014 and 2022, this percentage exceeded 50% of the total.
The importance of this historical data is that the higher the percentage of debt in local currency, the lower the currency mismatch risk. The government receives almost all of its income in pesos, so in the event of a sudden increase in the dollar, If your debt is mostly in pesos, you will have fewer problems making those payments.