Inflation and more rates: the risks of Massa's plan to refinance debt with banks

The Government is working on

to clear up financial uncertainty in the face of the first tensions with the opposition over the future of the debt in pesos.

The goal of Se

rgio Massa is to reduce the Central Bank's debt and refinance Treasury maturities

, goals that for analysts

and will entail risks for the economy, such as

The expectation is that, as the elections approach, the appetite for the pesos decreases and

.

In this context, the challenge of issuing bonds for 2024 and 2025 will be greater. As reported by Clarín, Massa seeks to get ahead with a

 that decompresses the $6.5 trillion that matures in the second quarter.

What is being negotiated now is the financial cost, which would be high, since the banks ask for "everything at the market level."

The difficulties are reflected in the yield of the inflation-adjusted bonds maturing in 2024. "The rates you have today are from three to six months, bonds that are two or three years old at 15% per year is that their parity is around the 75%, anticipating possible changes in conditions in the titles. It is one thing for the rate to be high and another for the market to see that it

, that break is in 2024," said Martín Salvo, CIO of Bind Inversiones.

To cover commitments and finance the deficit, Economy reduced placement terms and raised rates.

In the last tender, it validated a yield of 118% per year, and the next will be

.

Despite the fact that the incentive is higher than the Central Bank's reference rate (107% per year) and a projected inflation of 97% year-on-year, the banks continue to prefer the BCRA Leliqs and only lend to Massa until August, fearful of

default .

Since the agreement with the IMF, the Ministry of Economy unsuccessfully seeks the "migration" of private funds in Leliq towards Treasury bonds.

Thus, the stock of Leliqs and passes, which the BCRA uses to capture pesos from banks and sterilize them,

and represents the

today the

monetary issue, followed by for the purchase of bonds and soybean dollars by the Central. 

In the economic team they affirm that, if the Leliqs are reduced, no more pesos would be issued, but the economists believe that it is "expansive".

"The exchange of Leliq for public titles is the issuance of pesos, you disarm Leliq and give pesos to the banks, and later you generate less interest. You have to see how the public sector finances the interests of the new titles, if it leaves the Central,

," said Sebastián Menescaldi, deputy director of EcoGo.

Both the debt of the Treasury and that of the BCRA have been in the eye of the storm since Together for Change warned in a statement about the "bomb" that the Frente de Todos would leave for the next administration.

Patricia Bullrich should have made it clear to the banks grouped in ADEBA that there will be no reprofiling and

while she sent signals about the Leliqs.

"This is a job that will be publicly disclosed in the coming days with some measures that we are going to take. We have to reduce the Leliq, reduce the amount of pesos that are circulating today in the financial system and produce a spiral," said the minister in an interview with CNN.

His message, however, raised doubts in the banks, where they also assure that "reducing Leliqs means issuing more pesos."

In order to make banks want to lend to the public sector in the longer term, the idea is that the Central Bank

of the titles (PUT) in case the entities want to sell them, an alternative that also has costs.

"Reducing Leliq is voluntarism, the PUT that it gives to the banks means

because it is the Central Bank buying bonds," said a former BCRA official.

The debt in pesos, moreover, must be in tune with the external front.

In April, $2.4 trillion pesos are due and fewer dollars are expected due to the drought.

will begin to be seen day by day

, but surely less than last year, with which financial expectations may be complicated if the government does not come forward and do a debt swap," said Ricardo Delgado, head of Analytica.

NE

look too

The debt in pesos: $24 billion, an imminent inheritance that is scary

In the midst of the tussles over the inheritance, Massa negotiates a new debt swap with "insurance" for the banks