Buenos Aires — The Argentine Government faced this Wednesday, June 12, a new debt tender, in which it placed ARS$5.4 billion, on top of ARS$5.2 billion that were due and there was a strong proration, since it received offers for ARS$16, 4 billion. However, The highlight of the day is that the Secretary of Finance, Pablo Quirno, announced the end of the negative rate process.
“We consider that The negative real rate process has come to an end, having fulfilled the double objective of contributing to the consolidation of the balance sheet of the Central Bank of the Argentine Republic (BCRA) and being a fundamental pillar in the reduction of inflation during these 6 months of management,” said Quirno through his account on the social network X.
“In this way, it was resolved to void the Lecap maturing on July 12, 2024 (S12L4) and August 16, 2024 (S16G4),” he added.
Meanwhile, Federico Furiase, also an official from the Ministry of Economy, highlighted that the Government is prioritizing the reference rate signal of 4.25% effective monthly and the extension of duration of the Lecaps curve, of pesos that originally came from overnight BCRA passes.
“The negative real rate is diluted after the sanitation of the BCRA, where endogenous issuance went from 30% of the Monetary Base to 4%,” Furiase expanded.
After the announcement, the director of the consulting firm Ledesma and the consulting firm Outlier, Gabriel Caamaño Gómez, explained to this medium: “It is more a sign that there are no more rate cuts in anticipation of the drop in inflation and that the liquefaction process exhausted itself. Now the rate cuts will be after a drop in inflation and inflation expectations.”
For his part, Juan Manuel Franco, chief economist of Grupo SBS, said: “The determination comes after several months in which the government relied on the negative real rate to reduce the real stock of pesos, although we remain waiting. of future inflation records and to future decisions of both the BCRA via reference rate and the Treasury via rates validated in tenders to evaluate the change announced by the Government.”
The result of the tender
- The Ministry of Finance announced that in the tender on Thursday the 12th it awarded $5.4 billion, having received offers for a total of $16.4 billion.
- The total allocation was made in Lecap with maturity on September 13, 2024 (S13S4), prioritizing reinforcing the reference rate signal of 4.25% TEM, given that we consider that the negative real rate process has reached its end, having fulfilled the double objective of contributing to the cleaning up of the BCRA’s balance sheet and being a fundamental pillar in the reduction of inflation during these 6 months of management.
- In this way, it was resolved to vacate the Lecap maturing on July 12, 2024 (S12L4) and August 16, 2024 (S16G4).
Tender result
