These are the liquidity insurance on public securities that the BCRA sold to banks and that represent a latent debt of around $17 billion. Today, the Central Bank decided that the insured bonds do not count towards the Treasury financing cap even when they sell the put.
The Central Bank took a first step towards what will be, according to the economic team, the elimination of puts. This Monday, the monetary authority arranged an operational measure necessary to carry out the repurchase of these liquidity insurances on public securities that the banks have in their possession and that represent a “contingent debt” for the BCRA of $17 billion.
Through communication A8063, the Central Bank determined that the Treasury securities that banks have covered with puts, which currently do not count towards the cap on public sector financing that financial institutions have, will continue not to count towards that limit when the insurance is rescinded.
A source from the banking sector said that this is a “first step” towards the operation to buy back these liquidity options that the BCRA is negotiating today with the representatives of the banks and that Javier Milei and Luis Caputo promised will take place this Wednesday.
The Central Bank’s communication establishes that national public securities “whose liquidity options agreed with the Central Bank of the Argentine Republic are rescinded will be excluded from the limits provided.” This implies that banks will not be obliged to immediately dispose of Treasury bonds once they are no longer covered by a put.
The Central Bank has already approached the banks with a proposal to buy back these bonds, although the talks were still ongoing today. In this negotiation, the idea that the BCRA buys back the puts instead of buying the bonds directly (another of the alternatives that was considered) seems to prevail. Thus, the measure of exempting the securities from the Treasury financing limit even when they are no longer insured makes sense.
Note in development
Source: Ambito
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