Economy announced another bond repurchase for US$200 million

External debt bonds are being dragged down by the flight of dollars from emerging countries in light of the possible tightening of the Fed’s monetary policy and the increase in the yield of US Treasury Bonds. Today is a key day for the markets due to the minutes of the Federal Reserve (Fed).

After the increase in the United States interest rate by the Fed, and the publication of the unemployment data, all eyes are on the officials of the entity and the new indices that will be announced throughout of the week.

In this context, sovereign bonds in dollars, which fell as much as 5% on this day, rose to 5% thanks to Global 2029, Global 2046 (4.7%) and Global 2041 (3.7%). In this way, they also cut the losses registered in the last month and the country risk rises 0.2% to 1,916 basis points.

Until today, the Ministry of Economy spent 37.4% of the US$1,009 million of international reserves for the dollar repurchase operation announced by the portfolio holder, Sergio Massa. According to private estimates, as of January 31, it had carried out operations for US$374 million.

With respect, the market analyst and economist Salvador Vitelli pointed out that so far 92% of what has been repurchased by the government corresponds to the bond whose identification code is GD30. In other words, the global bond in dollars maturing in 2030, which is the most used to carry out Cash with Settlement operations. Next in importance is GD30 with 5%, while GD38 and 29 with 1% each.

Although the operation was announced by Massa as a mechanism aimed at improving the maturity profile of the debt in dollars, in the market it was interpreted as a way of formally showing that the Central Bank is going to openly intervene to control the price of financial dollars. With the drop in bonds, the economy decides to take advantage of the drop in price and continue with the foreign debt repurchase operation.