In the first test faced by the Ministry of Economy following the collapse of bonds in pesos that began last week, The Government had to raise its interest rates and collected just over $21.5 billion from the local market in the first auction of Treasury debt this month. In any case, Finance did not face pronounced maturities in this first part of June -barely a little more than $10,000 million-, but will need regarding $500 billion within two weeks.
Martín Guzmán offered five different lyrics today. A short-term Lelite, exclusively for mutual investment funds; two Ledes (discount bills) maturing this year and two Lecers (CER-adjusted bills) also maturing in 2022, which are the ones that caught all eyes.
“There was a rise in rates in CER and Ledes for instruments intervened by the Central. The BCRA forced a real rate that was not consistent with the rest of the real rate curve. It was not a good bid because the amount was very low. There are very high maturities at the end of the month”, he explained John Ignatius Paulicchieconomist from Empiria.
“Rates rose between two and three points. The bidding was moderately good within the mess. They took $10,000 million net, even though it was a small tender. The important thing is that they took something net and that they had to raise the rate, but the most important thing is going to come at the end of the month, ”she said for her part. Santiago Lopez AlfaroPresident of Securities Patent.
As announced by the Ministry of Economy, With the $21,587 million raised in the debt placement this Tuesday, “all maturities accumulated from June 1 to June 21 were covered and an extra amount was obtained for almost the same value”. “Of the total financing obtained, 68% of the amount awarded was in CER-adjusted instruments and the remaining 32% in fixed-rate instruments,” he continued.
“Within the framework of the Market Makers Program, the Second Round will be held tomorrow, where offers can be received and awarded for up to 20% of the total nominal value awarded in today’s tender,” he mentioned. Economy. That way, it might add up to $4.3 billion more. The amounts of this first operation are far from what the end of June will be. In that instance -the second bond auction will be on the 28th of this month- it will require regarding $500,000 million net.
One of the readings that fly within the Government itself is that the collapse of CER bonds that began last week was triggered by a context of markedly negative real rates compared to inflation. Even, they exemplified in an official dispatch, an indexed bond came to have a yield 10 percentage points lower than the price increase.
In this framework, some common investment funds – both companies and savers are identified here – began to redeem their FCI shares. In many cases, even migrated to UVA fixed termswhich end up being more convenient than bonds that pay below inflation.
Another element that is argued in the market, but that is also admitted in some official offices, has to do with the level of compliance that the economic program has with the International Monetary Fund, beyond the approval of the first review of quarterly goals. An official commented with resignation that fiscal signals are insufficient and that the objective of reserve accumulation is slowing down of what was foreseen in the original roadmap agreed with Washington.
The question of financing in pesos is not minor: financing in local currency is a central element that constitutes the agreement with the IMF in a transversal way. The pesos that the Government does not obtain in the tenders must be issued by the BCRAputting at risk the goals with the Fund. The volume of the fiscal deficit will also mark the financing needs. Without the chance of the external market, the tool of bonds in pesos is mainly at hand.
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