2023-06-02 00:34:11
He Banco Central finally it will force the provinces and local governments to cancel part of their liabilities in dollars with foreign currency that they take into account, or they will have to manage their own financing. The measure will come into effect from tomorrow.
This was announced by the institution through a statement after the board meeting on Thursday. The regulation establishes that local governments must present a proposal to the BCRA that contemplates a cancellation of up to 40% of the capital maturities and that the rest of the capital obtain new financing, minimum, with an average life of two years.
«The Board of Directors of the Central Bank of the Argentine Republic (BCRA) established the guidelines under which local governments must face capital maturities corresponding to issuances of debt securities registered abroad, other financial indebtedness abroad, and issuances of debt securities with public registration in the country denominated in foreign currency. This measure will be in force as of June 2,” it reads. the start of the statement.
This BCRA decision seeks to continue advancing in a debt relief process in foreign currency at a rate that is compatible with the foreign exchange needs of the economy and exchange rate stability, they indicated from the Central.
Why was the decision that affects the provinces made?
This measure arises at times when reserves reached a critical level, in a challenging political and economic context for the Government. On the other hand, according to the reports handled by the institution chaired by Miguel Pesce, the provinces have more than US$1.4 billion in cash and the requirement to cancel liabilities for the second semester does not reach US$500 million.
Official figures show that, in the first quarter of the year, las public companies (Aysa and YPF) and the provinces (mainly Buenos Aires, Santa Fe and Mendoza) demanded US$ 1,120 million from the BCRA to cancel debts, a figure equivalent to 37% of the net sales of dollars made by the monetary authority in that period.
Although the liquidation of agriculture, through the “Soybean dollar 3” allowed the BCRA to repurchase some US$ 1,400 millionfailed to reverse the negative net reserves that it has had for more than two months.
The objective of the BCRA is stop the bleeding of currencies extending to the provinces the same regulations that, for almost two years, obliges the private sector to refinance 60% of its commitments in dollars.
Source: Argentine News
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