In order to put the BCRA’s accounts in order, the Treasury was authorized to exchange LEFI public debt instruments with the monetary entity, which will be capitalized daily, while they can only be negotiated between the monetary authority and the banks.
The Central Bank announced this Thursday that will suspend the operation of passive transfers Starting July 22nd to clean up its balance sheet, After defining the technical and operational aspects of the Liquidity Fiscal Letter (LeFi), which will serve as the main liquidity management instrument of the banking system.
In order to put the BCRA’s accounts in order, the Treasury was authorized to exchange public debt instruments “Lefi” with the monetary entity, which will be capitalized daily while they can only be negotiated between the monetary authority and the banks of the national system.
Financial institutions will be able to acquire LEFI on a daily basis and sell all or part of their holdings to the BCRA, ensuring that the mechanism allows liquidity to be adjusted to the needs of the economy, the statement explained.
“This new letter will have a maximum term of 1 year and can only be negotiated between financial institutions and the BCRA,” he clarified.
What are the main features:
- Financial institutions will be able to acquire them and sell all or part of their holdings to the monetary regulator.
- This new bill will have a maximum term of 1 year and can only be negotiated between financial institutions and the BCRA.
- LeFi will be traded at its technical value and will not count towards the Non-Financial Public Sector Financing limit.
- With the migration of the BCRA’s passive passes, the financial cost of this surplus of pesos will begin to be assumed by the National Treasury and, for this, the Ministry of Economy will make a deposit in the BCRA with the objective of covering the financial cost incurred in the management of liquidity with the bill.
Source: Ambito
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