During the first days of the last week, the Government was found again under pressurewith several open fronts. To the tension by the interest rate and exchange rate They joined Corruption political complaints which ended up generating an increase in volatility.
In this context, the market reacted with a very demanded dollarwhich rose about 3%, while the curve in pesos continued punished. Bonds tied to inflation came to yield CER +32%and the shortest Lecap overcame the 58%.
The calendar did not help, since July and August marked the most complicated months in terms of the magnitude of debt matches. In contrast, September and October, although loaded with political definitions for the elections, they appear with a clearer financial panorama for the treasure.
To contain the situation, this week the Treasury modified lace regulations (again). The banks were able to integrate part of these demands with titles acquired in primary tenders with deadlines greater than 60 days, instead of delivering pesos. The strategy resulted: it was achieved Roll 100% of the maturities -about $ 7.7 billion – And there were even offers above what was required, although they were not finally taken. The balance of this play, on the margin, ends up being positive because everything was renewed, but the negative is that the success was supported to a extent that, in the facts, in the facts, forced the participation of banks.
As of Wednesday, after the tender, some calm arrived. The exchange rate stabilized around $ 1,340.
More exhibition in futures and sales in the spot
Looking ahead, attention is concentrated in the Future market. The government would have accumulated sales by some U $ 6,000 millionto moderate devaluation expectations, in a market that is settled in pesos and does not require delivery of dollars. The strategy seeks that the private ones sell in the spot and cover themselves by buying in the future.
The intervention limit is US $ 9,000 million. According to estimates, the BCRA would have closed the week with a negative net position of US $ 5,200 million in futures. The immediate challenge will be to see how many contracts manages to renew in September, key to avoid exchange shocks in full electoral campaign.
To the latter is added that, in the last hours, it was analyzed that the treasure would also have operated in the spot market, Selling currencies. This is estimated from movements in the treasure account in the BCRA: dollar output and, simultaneously, peso income. This suggests that the decrease in currencies not only obeyed payments with multilateral credit organizations, but also direct sales in the market, which would be around the US $133 million.
That is why the column title is to kill or die. If it is confirmed that the treasure sold dollars in the spot, it means that it used its “Silver bullet” To contain the exchange rate, betting everything for an electoral triumph to bring certainty and normalize curves in pesos.
In short, the official strategy allowed the government win some time, but at a high cost: more exposure in futures and, possibly, direct sales of reservations in the spot. While the elections can bring a turn in expectations, the truth is that the treasure needs to rebuild dollars quickly to face immediate commitments.
The open question is at what cost the government can keep this calm to the legislative of October And, at the same time, if with a victory on the side of the ruling party will reach to normalize rates curves in pesos and that the Treasury manages to buy dollars to be able to face next maturities.
Partner in AT Investments
Source: Ambito
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