Wednesday, December 7

Debt: Guzmán added in 2021 net funding for $ 731,405 million


This operation was an important post, since the end-of-month maturities are around $ 285,000 million. The Ministry of Finance, headed by Rafael Brigo and Ramiro Tosi, had an extra $ 105,000 million cushion obtained in the first bid in December and had announced that it would seek at least $ 265,000 million. The intention was to preserve the bulk of this accumulated funding and not to trigger a new jump in the monetary assistance of the Central Bank in the last days of the year: until the 23rd it had already accumulated $ 481,816 million in the month, after the entity was in that round. will turn to the treasury $ 136,816 million.

Finally, Finance captured more than was due and increased the monthly balance. The maturities to be refinanced in this tender included, in addition to those originally scheduled for December 31, those with a payment date of January 3, 2022, the day on which this auction will be settled. “Therefore, the $ 334,445 obtained today allows refinancing the maturities of $ 292,377 million,” they explained in Economy.

Thus, December ends with a positive net financing of $ 147,074 million, the second highest of the year, and a refinancing rate of 146%. This Thursday, in the second round of the auction, in which banks and Stockbrokers designated as market makers will participate, Finance may add some extra.

Yesterday, the 14-day Lelite (exclusively for mutual funds) raised $ 29,843 million at a nominal annual rate of 34.65%. The three Ledes offered together contributed $ 146,018 million with rates of 40.98% in February, 43.19% in April and 44.27% in May. The new letter indexed to inflation (Lecer) to October was the one that attracted the most funding: $ 90,337 million at a real rate of 1.26%. Then, in the 2023 Badlar rate bond (TB23), $ 34,436 million entered at a nominal annual rate of 43.19%. And the two Boncer (T2X3 and T2X4) contributed $ 33,811 million at 2.33% and 3.66% in real terms respectively.

Equilibra’s chief economist, Lorena Giorgio, highlighted that, to attract this higher funding, Economía “ended up validating higher rates.” For example, in the bidding two weeks ago, the Ledes to April had cut to 42.74% annual nominal and the one that expires in May, to 43.5%. The Boncer T2X3 had also been offered that time and had paid 2.24% real.

In this regard, official sources told Ámbito that there was a recognition rate, according to the instrument, of between 0.35 and 0.60 points but “in a market where at this time of year liquidity suffers.”

It was a bet to gather more net financing this month and try to limit the issue in a December always complex due to the high seasonality of the deficit. “The month came with a lot of assistance from the BCRA because we estimate a primary deficit that will be around 1% of GDP. That is why it was essential not to erode the market’s funding cushion, ”Giorgio pointed out.

Closing 2021 and what’s to come

In recent months, Economics had indicated that the objective was to end the year with accumulated net financing of over $ 600,000 million and a rollover of annual maturities of between 115% and 120%. With this result, he managed to exceed those figures.

The one that will not be reached is the budgeted guideline of covering 60% of the fiscal deficit of 2021 with direct assistance from the Central Bank and 40% with new debt in pesos. A financing mix that Guzmán had designed to reduce the monetary issue with respect to 2020 under the premise that a strong injection of working capital would feed back the pressures on the dollar.

With the latest data available, the BCRA’s assistance to the treasury accumulated $ 1.9 trillion in gross terms, that is, without discounting the prepayment of temporary advances that the Government made after the entry of the IMF’s special drawing rights (SDR). that the bulk of analysts consider that this operation had no concrete monetary impact. That equates to 72% of financial sources, well above the 60% guideline. Officials do consider that the issuance must be netted with that pre-cancellation: in this case, it would accumulate $ 1.5 trillion and would represent 67% of Treasury financing.

All in all, monetary assistance will end the year with a significant reduction compared to the 2020 shock, when (with almost no access to credit in pesos after the 2019 reprofiling and with the covid package in full force) it reached 7.3% of GDP. In 2021, it accumulates between 3 and 4.2 points of the product, depending on whether or not the prepayment of advances made with the SDR is counted.

For next year, the financial program will be conditioned by negotiation with the Fund. Guzmán’s budget project, which was blocked by the opposition in Congress, proposed a reduction in Treasury financing via issuance to 1.8% of GDP. The scheme to cover needs for 4.9% of the product was completed with 2% of new debt in pesos and 1.1% of net disbursements from multilateral and bilateral organizations. It remains to be seen what is finally agreed in the multi-year program.

Within this framework, next year the Ministry of Finance will face the challenge of renewing maturities for more than $ 4 billion.



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