The Government has begun the process of transferring debt from the BCRA to the Treasury for banks and the Minister of Economy has celebrated the measure on social media.
Luis Caputo launched the second phase of his economic program.
Mariano Fuchila
The Minister of Economy, Luis Caputo, celebrated the Suspension of the operation of passive repurchase agreements ordered by the Central Bank (BCRA) and will come into effect on Monday, July 22. The official said that this step is “one more bomb defused.”
“In 6 months, the government of President @JMilei ended the fiscal and quasi-fiscal deficit. Not even the most optimistic would have imagined this,” the official said from his account on the social network X (formerly Twitter).
The BCRA measure will come into effect in 10 days. Likewise, through the Communication “A” 8060the board of directors of the monetary authority defined the technical and operational aspects of the bill, which, as announced, “will serve, from that date, as the main instrument for managing the liquidity of the banking system.”
From the financial innovation company Inviu they pointed out that this measure reflects the need to sterilize the excess of pesos” in the economy and that it forms part of the official strategy of migrating the debt from the Central Bank to the National Treasury to eliminate the endogenous source of issuance that passive transfers implied.
“The LEFI, issued by the National Treasury and capitalized at the BCRA’s monetary policy rate, will allow financial institutions to adjust liquidity according to economic needs. This letter, with a maximum term of one year, It will be negotiable only between financial institutions and the BCRA. The Ministry of Economy will cover the financial cost of the liquidity managed with the LEFI, depositing the necessary funds in the BCRA“, they added.
Economist Santiago Bulat explained that since the new government took office, the monetary base has increased mainly due to the purchase of dollars, the payment of interest, the lower sterilization of repurchase agreements and the execution of PUTS (promises to purchase Treasury bonds by the BCRA). Starting with the LEFI, the specialist said, issuance for interest would be eliminated.
The end of remunerated liabilities would pave the way for the elimination of PUTS, and this in turn would facilitate the exit from the exchange rate restriction, according to the plans of the team led by Caputo.
Source: Ambito
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