The latest and greatest increase in BCRA rates: an attempt to start a debt ceiling

The latest and greatest increase in BCRA rates: an attempt to start a debt ceiling

The entity left the Leliq rate below the fixed term to allow banks to buy securities from Central and Guzmán.

Minister Guzman, along with his finance team, will receive bankers from Adeba and ABA on Tuesday and Wednesday.
Minister Guzman, along with his finance team, will receive bankers from Adeba and ABA on Tuesday and Wednesday.

On Thursday, for the first time, the Central Bank (BCRA) left a minimum adjustable interest rate on time deposits than it pays banks for Liquidity Letters (Leliq), securities it sells to market participants to absorb pesos, and so on. Help them finance their savings, given that in many cases this forces them to lend at a loss.

An unprecedented and surprising step reveals the sensitive moment that the economy is going through.

With,, The unit, led by Miguel Pesche, is not just trying to get more people to agree to allocate their excess pesos for this type of short-term placement. (He argued that anti-inflationary action – with such a shrinking credit market – largely meant they had to go there to facilitate exchange and financial stability). But – mostly – to persuade banks not to use the liquidity they have – and hope that they will grow – to invest more in Leliq, but to allocate it to finance the treasury, buying from it the securities to be issued for renewal. Debt that beat him and something else.

Official bet points to what Vice President Christina Kirchner once called “Win-Win”. However, in reality the scheme is only aimed at the Minister of Economy Martin Guzman and the President of BCRA to stop the “loss”.

specifically, This serves to divert Guzman’s financial plan, which has already stalled in May, and this month – with the release of debt, which will mature again this year – and Pesce, so that the stock of BCRA liabilities – already intends to increase due to growth. Interest burden – at least not so much due to bank subscriptions.

“The decision to increase fixed-rate rates further seems to be aimed at finding greater incentives for banks to refrain from treasury debt despite the risks,” they explain to Facimex Valores.

A complex picture
A complex picture

“The scheme calls on banks to invest part of their liquidity in treasury securities in order to seek benefits,” they agreed in an assessment by Cohen Aliado Financieros.

The official decision in the banks fell like a bucket of cold water. “It’s understandable given the circumstances, but we did not expect it,” explained one of the organizations’ executives, who will attend a meeting on Tuesday in which Minister Guzman, along with his finance team, will try to persuade them. Accompany him to an auction next week in which he will need a $ 590,000 million upgrade to expire and even catch a fiscal red that throws up again.

The suspicions of the bankers are due to the “sustainability” of the debt, which the Minister insisted on.

Tariffs paid by the Treasury on fixed exchange rates, which it sets at a fixed rate, do not “close” them, although after the last auction they were 136 basis points higher than those paid on the 28-day Leliq (53.36 v. 52%). Annual denominations) and securities that regulated inflation (which they preferred because they allowed them to protect entities’ assets) are now considered distrustful, given that the next administration will continue to convert them to “liquid”. Through restructuring.

The rate difference in favor of Treasury bonds already existed, because even though these are tax-exempt titles, for Leliq you have to pay 8% of CABA total revenue. Demand is declining, however“Explained a senior official in the banking sector, for whom the economy should not only increase revenue, but also to innovate in the menu tools to deceive investors and be able to pass the exam, which will meet next week. .

“And from now on, start correcting the numbers to restore credibility in the coming months, given that what is to come is a preview of several auctions that will be a real test in the coming months.” He insisted on a $ 3 trillion paper reference in the second half of the year alone.

Therefore, the meetings are expected to take place between Tuesday and Wednesday ᲔᲠᲘ, They promise to be the key to the tender, which will take place at the end of the month and in which the economy must renew at least $ 600,000 million, in addition to catching a few more pesos to cover the deficit. Now that it can receive assistance from the BCRA, it is still running out after spending $ 232,000 million in the first two weeks of the month, up 61% of the quota, which has expanded by about $ 380,000 million since the resumption of the 2021 accounting maneuver. From SDRs received from the IMF in March.

It is no coincidence that BCRA did not do what it did for the first time in terms of rates.

Source: La Nacion

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