Argentina placed this Tuesday in the domestic market bonds of the Treasure in Argentine currency for a total effective value of 500,000 million pesos (about US$604.7 million), official sources reported.
In this Tuesday’s operation, the last of this year and the second that the Treasury has carried out since the ultraliberal economist Javier Milei assumed the Argentine Presidency on December 10, only Treasury bonds with yield tied to inflation and expiration in February 2025.
The objective of these tenders is to obtain financing to meet successive Treasury debt maturities and, in addition, to capture the high liquidity of Argentine pesos.
Milei launched a severe fiscal adjustment plan that, among other things, seeks to end the monetary issue to finance the Treasury and reduce the mass of remunerated liabilities of the Central Bank.
Last week, the monetary authority adopted as the reference rate for its monetary policy the one applied to Passive Repos placed among commercial banks, which it lowered from 126% to the 100%and also decided not to issue more Liquidity Letters (Leliq), which encourages financial entities to look for Treasury instruments as an alternative.
This was already seen last Wednesday, when in a tender for bills and bonds the Treasury obtained financing for 2.96 trillion pesos.
According to the firm Delphos Investment in a report, “This allowed the Treasury to absorb a very significant amount of liquidity at negative real rates, which reduces the financial cost of dismantling the Central Bank’s remunerated liabilities.”
Source: Gestion
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