Luis Caputo took US$3.2 billion from BCRA to repay the loan and left a non-transferable deed

One who does not know how to break, does not know how to rule. This is what the mythology says. and he practices it President Xavier Miley, which in the last hours on Saturday again started the machine of decrees of necessity and urgency. Too His minister, Luis Toto Caputo.

It was the head of the Treasury Palace who, out of a sense of alleged libertarian pride, had long ago decided to publish a little piece of garbage in the official bulletin: more debt. You know, the common denominator of both is shortage of dollars, what kind of problem is this, the last days of the government have come.

It feels like the need and urgency is there. Through DNU 23/2024, Casa Rosada sent an order to the Central Bank: that is, its owner santiago bosilli, with a term of 10 years and to repay the loan in foreign currency, lend approximately US$3.2 billion to the national treasury. Of course, the loan means something in return: National Treasury will give BCRA non-transferable letters maturing in 2034.

So that makes sense, dollars from the BCRA reserves would go to the Treasury and in return Minister Luis Caputo would leave them a bond until 2038 that cannot be transferred or liquidated (no puts, of course)., Change of creditor? perfect.

Dress me quickly because I’m in a hurry: From Xavier Miley to BCRA

The fact to keep in mind is that this mechanism is against what is provided for (sanctioned) by the national constitution, so the urgency refers to the fact that it is imperative to pay the loan here and now, and there is no time for bureaucracy. Circuit feed. He estimated in the Casa Rosada that there are 3,200 million US dollars, which can be requested because in recent weeks the Central Bank managed to accumulate net reserves, practically taking them into positive territory until the payment to the IMF. As a result they did not fall again. ,

Yesterday, President Miley uploaded a post on social networks for the distribution of $792 million scheduled for June. The IMF determined that the primary surplus was four times larger than expected, the Central Bank’s reserves were accumulated more than $2,000 million at the time, and monetary issue was within established limits.

However, today the government has enabled the cashing out described above: go to the cashier and find US$3.2 billion and turn it in over 10 years. Because yes, because it can and thanks to the monetary issue used in the last weeks.

Rollover and More Loans: Forever Stock

There is a Yapa in the same DNU: Redemption of all interest servicing and other non-transferable treasury bills held by BCRA (estimated to contain approximately US$68.5 billion), as well as the securities issued this year, which will, on their maturity date, be replaced by new public securities whose terms will be defined together by the Secretaries of Finance and the Secretariat of . The secretaries of the treasury, both from the Ministry of Economy,” the decree says.

As can be understood, It seems that the government is ready to maintain the stock as long as necessary from now on, Yesterday, the Institute of International Finance estimated that complete liberalization of the foreign exchange market (lifting of stocks), “Which should pave the way for growth recovery, requiring an additional $10 billion of reserves”, To this we must add that thanks to the exchange rate, the BCRA was able to keep a good part of today’s net reserves, while the other part will be lost during the year as a result of the “mix” liquidation of exports. This would have to be done through CCL and which, according to its calculations, would amount to 80% of the trade balance, equivalent to about US$25,000 million.