The debt swap and the Massa method: kicking the ball forward

were presented to the Minister of Economy

in the face of the bulky level of maturity of the debt in pesos in the next three months.

One was to issue a show of hands and write off the nearly $6 trillion due through August.

The other, arbitrarily reschedule the maturity of the bonds.

And the third,

of that debt a bond swap for the equivalent of $7 trillion maturing in 2024 and 2025.

If 80% of the debt to mature is in the hands of banks and public organizations that will do what the Government decides and the remaining 20% ​​in the portfolio of private banks willing to refinance the bonds that are maturing, the viability of the exchange gains

The first financial consequence of the swap, should it come to fruition, is the

by this means of a

shock that could make inflation or the dollar rise even more.

Previously, both banks and mutual funds will have begun the hedging path, both with the dual bond (inflation or devaluation, whichever yields more) and with the titles with CER.

Massa is cementing the

annual inflation and offering

by tying the bonds to an official dollar that is 21% behind its historical average. 

For companies and the financial system, these alternatives are an opportunity to start the path of coverage that, until the last few weeks, when inflation began to pick up, pointed to fixed-term loans with a rate of 6.2% per month that, with the days and cost of living indices, could be less attractive.

The Minister of Economy tries to clear the short-term financial bottleneck that implies the expiration of the obligations in pesos but he also tries some

The announcement that there will be a

, with a still indefinite increase in the official dollar to

from wine exports and from regional economies, ratified the

scheme given the notable shortage of foreign currency registered by the Government.

They do not have dollars and

week by week at the rate of bad forecasts about the impact of the drought on agricultural production and exports.

The market ignored the criticism of the opposition of Juntos por el Cambio to the debt swap, which it described as a

but the day after the announcement the dollar price of Argentine bonds

.

The discussion about the economic inheritance that the Government will leave began to gain intensity in the heat of the exchange announcement.

The economist Miguel Angel Broda, in his latest report, concludes with an interesting comparison about the inheritance that the next government will receive and maintains that it will be

Broda compares 17 variables and shows that in 11 of them the result is worse for the Government that will take office at the end of the year than in 2015.

Comparing, the public debt of the Treasury, both in pesos and in dollars, will be worse and the same will happen with the level of reserves available in the Central Bank which, at the end of 2015, were negative by US$ 3.35 billion, and this year they will be. in US$ 10,742 million.

The gap between the official and blue dollars would also end up being wider (it was 52% and is now around 90%), but the real exchange rate lag would be less.

and it is not believed that the Government has much room to continue delaying it.

The report estimates that the inheritance will be less burdensome in terms of public tariff arrears and, therefore, in the level of economic subsidies for electricity, gas, water and transportation, and also bets that primary public spending will end at 20.6 % of GDP while at the end of 2015 it represented 24 points.

Regarding the fiscal deficit, he calculates a worsening towards the end of the year and also estimates that the result will be negative in the actions of the Central Bank, quasi-fiscal deficit.

With the bond swap, Sergio Massa pulled

(before it was soybean dollars 1 and 2) in an attempt to avoid an additional issuance shock due to the maturity of the debt before August,

Offering CER bonds plus an interest rate, bonds tied to an official dollar in arrears to face a risk of devaluation is

in a context of inflation and uncertainty as high as the current one.

The reinforcement of an

that want to get rid of bonds in the future is also part of the coverage scheme that is looking for a more captive financial system from government management.

Massa continues to show signs of being willing to

in order not to apply a formal devaluation of the peso, following the unwritten political rule that 

look also

For the opposition, the swap is "a vile and ruinous operation for the State"

Debt: what are the benefits and risks of this new bond swap