Ismael Bermúdez
11/24/2020 9:31 AM
Clarín.com
Economy
Updated 11/24/2020 9:38 AM
Public debt in pesos tied to inflation and, to a lesser extent, that linked to the dollar, euro or yen is the one that is growing the most.
According to data from the Ministry of Finance, 87.9% of the US $ 330,586 million of the “gross debt in normal payment situation” is contracted in these two variables.
In December 2019, that same debt totaled US $ 320,525 million and 85.3% was in foreign currency or in pesos linked to CER (inflation).
Thus, the debt increased between January and October by the equivalent of US $ 10,058 million,
mainly due to the greater weight of the debt in national currency tied to inflation
.
Meanwhile, the Government refuses to include in the mobility formula that Congress is going to discuss a clause that guarantees that the mobility of pensions and social benefits may not be less than the rise in consumer prices (CPI).
“The successive debt swaps and placements that the government carried out this year increased the importance of the amount of debt adjusted by CER (inflation).
In December 2019, the debt adjusted by CER reached US $ 24,451 million, growing to US $ 39,917 million last October, "says Jorge Neyro, economist at the ACM consultancy.
"In this way - he adds - the share of debt adjusted for inflation
went from 7.6% of total debt in December 2019 to 12% in October 2020
, being the type of debt that grew the most this year. Although this growth is partly explained by swaps that de-dollarized the debt, the weight of the debt adjusted by CER grows in line with inflation,
which accelerated to 3.8% per month in October ”,
Official data indicate that in the first 10 months of this year, the debt in pesos adjusted for inflation increased by the equivalent of US $ 15,466 million, the debt in foreign currency, by US $ 1,655 million, and the debt in pesos not adjustable by inflation decreased by US $ 7,065 million.
Lorenzo Sigaut Gravina, economist at Ecolatina, explains that “as a result of a high fiscal deficit, which in some way has to be financed, the stock of public debt increased in the first 10 months of the year by just over US $ 10 billion.
With access to external financing closed (the country risk is clearly above 1,000 basis points), the indebtedness was mainly in local currency ”.
Sigaut adds that part of the fiscal deficit “came from financing in pesos from the Central Bank - such as Transitory Advances for which the Treasury does not pay interest - and another from net placements of Bills and Securities.
There, the placements tied to the CER or indexed to official inflation stand out, and in recent weeks the placement of dollar linked bonds that pay in pesos but according to what happens with the official dollar price ”.
Sigaut concludes that “
in a context of high uncertainty and exchange / inflation risk
that
is not offset by the
interest
rate
in pesos, it is logical that the Treasury placements that have grown the most are those that adjust for inflation (CER) and, recently , for the official dollar.
If the Treasury had not offered these assets indexed to inflation or to the official exchange rate, it would have had to increase the
interest
rate
of its fixed income instruments
sharply
to attract the financing in pesos that it obtained ”.
NE
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