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Saturday, January 28, 2023

The Central Bank decided to raise the passive repo rate by 200 points: what does it imply

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Why does the BCRA take this measure? As he explains to Ambit the economist Federico Glustein, given that at this moment there are no assets, the measure focuses on passive countries. “Right now, there’s a stock of $1.8 trillion, which means that if all those passes stop renewing, they could migrate to other options,” he says. And that could complicate the debt panorama, which has been renegotiated with quite good results, and in exchange matters.

“They are showing the market that they are determined to avoid any run and counter the dollarization of the market and, on the other hand, that they are going to continue with this policy of high fees for passes, despite many in the City warning about the risks of having such a high level of liabilities,” interprets Glustein.

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Also, in combination with this measure, this Wednesday the Economy authorized the BCRA to carry out the repurchase process. As detailed by the minister, Sergio Massa, in order to “continue improving the external debt profile and lowering the country risk, elements that improve the possibilities of companies and the state to access the capital market.”

Massa anticipated that they will aim, mainly at improving the maturity profile of short-term global bonds, which is where there is more positioning at the moment.

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(note in development)

Source: Ambito

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