By Jorge Otaola
BUENOS AIRES, March 6 (Reuters) – Argentina’s financial market closed on Monday in a speculative reaction by savers to the government’s announcement of a new voluntary internal debt swap to ease short-term uncertainty, postponing repayments to 2024 and 2025.
Market operators believe the deal could involve securities worth some 9.8 trillion pesos (about $49.160 million), while financial sources told Reuters that details of the new inflation-adjusted securities ( CER) or the devaluation of the exchange rate (dollar link).
For the government, it is about generating tranquility, while analysts see only a huge financial problem carried over.
It is “giving predictability” to the market to improve access to credit. We are looking for “the certainty and credibility of the Argentine economy,” said Economy Minister Sergio Massa.
Argentina holds presidential elections towards the end of the year, against the backdrop of an economic slowdown, dwindling central bank reserves (BCRA) and an expected annual inflation rate close to 100%.
“Since the debt that is about to mature before the election is unpayable (…) the best thing is to make a voluntary exchange and try to pass the maturities of this debt until the entry depending on the next government,” said Aldo Abram, Executive Director of the Freedom and Progress Foundation.
Meanwhile, the government and the International Monetary Fund (IMF) have continued to negotiate the reserve targets (BCRA) for 2023, which the country is seeking to ease, as the entity needs these currencies to meet severe challenges. serious financial problems as well as historical agriculture. drought. .
* Over-the-counter sovereign bonds improved 1.1% on average, after gaining 0.9% on Friday in reaction to a Reuters preview of the government’s work on a new debt swap.
* The country risk measured by the bank JP. Morgan fell by 27 units to 2,064 basis points at 20:00 GMT, with the prospect of crossing the 2,000 unit mark again a few weeks ago.
* “Exchanging Massa is exchanging one bonus for another with new terms. To understand it very simply: reprofiling is adding 15 more minutes to the game and an exchange is starting to another sport,” said economist Natalia Motyl.
* He added that “I don’t think the swap is going to create any problems in the market today, as it in itself will put pressure on the next four months. It’s a sign that at least there isn’t ‘there will be no outflow of assets in local markets’. currency to foreign currency assets and are attractive bonds for now.
* As new deadlines with debt rescheduling shift to the next government’s management, the opposition led by the centre-right coalition ‘Together for Change’ criticized the measure.
* For its part, the main stock market index S&P Merval improved by 2.91%, to 253,018.57 units at the provisional close, driven by the rise in the energy sector. Shares of state oil company YPF rose 7.63%.
* “The one who progressed the most in the region on Monday is the Argentinian Merval (…) who recently recorded a record of around 267,000 points,” said ActivTrades analyst Alexander Londoño.
* The interbank peso depreciated 0.53% to 199.34/199.35 to the dollar with the BCRA regulation having to sell some $42 million due to genuine market demand.
* Minister Massa announced this weekend the establishment of a special exchange rate to encourage exports from regional economies, with the idea of strengthening the BCRA’s accounting.
* The currency in the alternative segments rose to 373 units in the “CCL” stock market, to 362 in the “MEP dollar” and up to 372 per dollar in the informal or “blue” benchmark.
* In the external backdrop, markets have been operating cautiously, in a week when US Federal Reserve (Fed) Chairman Jerome Powell will speak, and jobs data will be in that could decide the pace of gains. future interest rate hikes. interest. (Reporting by Jorge Otaola; Contribution by Hernán Nessi; Editing by Walter Bianchi)