If the original agreement with the Background where the goal was $880,000 million by 2023 (0.6% of GDP), the Government would have exceeded the goal of the fourth quarter of 2023 by 149%, market sources indicated. At the same time, they claim that the largest number of transfers was held in the month of August pressed by the need to financing prior to the STEP.
According to the consultant Delphos Investments, “continuing this rate of direct monetary financing until the end of the year would imply up to $4 trillion (2.5% of GDP) of transfers to the Treasury. For Paul RepettoHead of Research at Aurum Values“the margins are all exceeded when it comes to the old goals with the IMF”.
“We do not know the commitments that have been assumed because they have not yet been reported (except for the accumulation of reserves by the end of the year). On the other hand, the BCRA has been financing the Treasury in multiple ways, so the most serious thing is the inflationary impact of monetary expansion in a context of falling money demand”.
Within this framework, Delphos recalls that the fiscal path agreed with the IMF “does not imply a dependence on monetary financing straight”.
As it turned out, the recalibrated program keeps the pattern of annual fiscal deficit of 1.9%which would force a tax adjustment in the last stretch of the year.
What is the margin of the Central Bank?
According to Organic Charterhe central bank still has room to distribute profits for $270,000 million and Temporary Advances of $660,000 million to cover the pothole.
“Treasury accounts have not been closing for a while with bond placements. The BCRA has had to attend more frequently, it is probably a matter that will continue throughout the year. In the middle of the electoral quagmireit is difficult for the Treasury to place the amount of bonds necessary to 100% finance the deficit. “We have to see what happens after the PASO and the government program after the electoral result, if it will impact the cash needs of the Government and if it will request assistance from the BCRA. The temporary advances are close to the limitexplained the economist Jorge Nero, in dialogue with Ambit.
A key day for the market
In search of money to finance the Finance Secretary will hold this Thursday last bidding prior to the primary elections, with the objective of obtaining funds to renew maturities for $710,000 million.
It occurs in an environment of high demand for currency hedge. According to Delphos, “the absence of instruments dollar linked It is striking given the strong demand for these assets in the run-up to the PASO. This suggests a Treasury preference for placing inflation-adjusted debt after the acceleration of the rate of devaluation this week”, which estimates that this adjustment will probably impact the CPI.
The main challenge this Thursday is whether or not Finance manages to increase the level of roll over (the last one was 120%), so as not to increase the monetary assistance from the Central Bank.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
