The Government believes that in the remainder of the year, external investment funds should exert less pressure on the dollar price “counted with settlement (CCL)” since there were few positions of this type of holders in instruments in local currency that may try to exit through this operation in the financial market, so attributes the increase in demand for CCL to local funds.
The dollar counted with settlement, which is the price that arises from the sale of bonds in pesos and dollars, together with the sending of those funds to accounts abroad, closed yesterday above $ 212, so accumulates a rise of almost 30 pesos since the legislative elections. Both the CCL and the MEP dollar they were no longer intervened by the Central Bank with additional offer and their prices quickly surpassed $ 200.
In the Ministry of Economy they consider that the main pressure on that price, which thus marks an exchange gap of almost 112 percent, comes from investors in the domestic market who seek to exit their positions in pesos and deposit their dollars abroad through this operation. In this way, they rule out that it is a massive outflow of external investment funds, which to a significant extent were “trapped” in peso securities when capital controls were imposed.
The economic team in recent months faced conversations with this type of external investors who have in their possession Argentine bonds in pesos to prevent them from withdrawing from their positions in local currency and putting even greater pressure on the “cash with liquid” and on the gap. . Even the Minister of Economy himself, Martin Guzman, had a one-on-one meeting with some of them on his last trip to the United States, in October, when he participated in the IMF’s annual meeting.
According to official estimates, external funds still have investments in pesos for the equivalent of some USD 7,500 million, which could represent a threat to exchange rate stability if they decided to massively exit their positions and switch to dollars, something that they could do only for “cash with liquid”. In this sense, foreign investors participate in the usual debt tenders and in the Palacio de Hacienda They assure that there were no unrenewed pesos of those positions that could be directed to the dollar.
This Thursday the Government again put out to tender debt in pesos. In the second tender in November, the Treasury raised $ 126,063 million, that is, 180% more than what was due this week. In the accumulated of the month, after this tender, in which $ 44,950 million expired, the Treasury obtained $ 149,388 million.
According to the Ministry of Economy, in the year the Treasury accumulates a positive net financing of $ 592,645 million, which implies a refinancing rate of 120% per year. In the last tender of the month, to be held on November 26, the maturities to be faced add up to $ 225.7 billion.
Public debt grew in October
Public debt grew again in October after having had a low month in September and reached USD 348,346 million, that is, about USD 5,700 million more than the previous month, mainly explained by the greater amount of temporary advances of the Central Bank towards the national Treasury and the greater weight of bonds tied to inflation.
According to the latest data published by the Ministry of Finance, as of October 31, the gross public debt had an advance of almost USD 15,000 million compared to the same month of the previous year, which implies a 4.5% increase in liabilities measured in hard currency.
Of the total measured by the official report, some USD 225,000 million correspond to public securities issued by the national government, almost USD 78,000 million in bilateral loans, among which are those of international organizations, and some USD 10 billion more Treasury bills.
Gross public debt had an increase of almost USD 15,000 million compared to the same month of the previous year, which implies a 4.5% increase in liabilities measured in hard currency
The difference that explains most of the USD 5.7 billion of nominal growth in public debt measured in dollars is explained in two elements. In the first place, the acceleration of the sending of transitory advances from the Central Bank to the Treasury. In September they represented a sum equivalent to USD 5,115 million. A month later, that account already amounted to USD 8,424 million, an increase of almost 65 percent.
Another factor was the weight that the bonds tied to the evolution of inflation gained in the last debt operations, one of the public titles that is usually offered on the menu in the tenders that Finance makes to investors in the local market. The bonds that follow the CER index were equivalent in October to USD 44,817 million, that is almost USD 1,500 million more than the previous month, mainly due to Boncer placements. Currently, six out of every ten pesos of debt issued are tied to inflation.
Among the international creditor organizations of Argentina, the IMF has the largest participation in the Argentine debt, since it concentrates -after the payment of the first capital installment in September, for about USD 1,900 million- a remainder of USD 43,294 million, which are the ones that the Government seeks to restructure through a new financial program signed with the Monetary Fund.
According to figures from the Congressional Budget Office (OPC), in October three market tenders were held that resulted in the placement of different instruments for a total cash value of $ 466,281 million. Public securities in national currency -Lecer, Ledes, Lelites, Bonte, Badlar and Boncer- were subscribed in pesos for $ 297,193 million and bonds denominated dollar linked for $ 90,897 million.
On the other hand, that agency estimated that net placements of temporary advances from the Central Bank were registered for $ 335,000 million, so the stock increased to $ 1.36 trillion. At the end of September, the legal maximum limit on the stock of temporary advances was $ 2.17 trillion.
Measured in dollars, for the last two months of the year maturities are estimated for the equivalent of USD 8,672 million, which are reduced to USD 8,075 million if intra-public sector maturities are excluded, the OPC considered.
As reported on Monday by the Ministry of Economy, in October the net financing for the month reached $ 26,645 million, for which a net financing of $ 443,257 million was accumulated in 2021. In this way, the refinancing rate was 116% When considering the first ten months of the year, in line with what the Ministry of Finance is looking for, it expects to end the year with a roll over of between 115 and 120 percent.
According to official data that covers until the second quarter of the year, public debt is equivalent to 91.1% of Gross Domestic Product. A figure lower than what it marked at the end of 2020 (102%) but higher than what it had registered at the end of 2019 (88.8 percent). In any case, in the last two years the weight of debt interest fell sharply, which in 2019 was equivalent to 4.2% of GDP and now represents 1.8 percent.