:quality(85)//cloudfront-us-east-1.images.arcpublishing.com/infobae/6R5P433LKRAOTGPG2JW6NVG4UM.jpg "Provincial debt: Governors have already paid $330 million in interest this year and put pressure on reserves 1")
A group of provinces so far this year has made interest payments on its dollar bonds for more than $330 millionwhich added another pressure factor to the Reservations of the Central Bank, in full discussion for a new objective of accumulation of dollars which had just been defined these days with the IMF. Throughout the year, the governors will consume more than $1.5 billion to the BCRA to meet its foreign currency obligations.
The most expensive payment to date in 2022 is the one made by the Province of Buenos Aireswho paid in the first days of March approximately $192 million in interest of its restructured bonds in 2021. At the end of March, with drafts to its creditors also adding Santa Fe y Mendoza, among other jurisdictions, provinces will have prosecuted more than $560 million to the monetary entity in the first quarter of the year.
According to estimates by the consultancy firm specializing in provincial finances Politikón Chaco, the district that governs Axel Kicillof paid interest in March on its bonds issued with due 2037both in US dollars ($183.3 million) as in euros (8.8 million).
By the end of March, with the transfers to its creditors that Santa Fe and Mendoza are also adding, the provinces will have demanded more than $560 million from the monetary entity in the first quarter of the year.
BCRA’s demand for dollars to meet interest payments or amortization of its foreign currency securities has increased so far this year. In January, for example, the total payment was $51.5 million, which is broken down into $30.5 million who paid chubut, 12 millions of Cordoba (for an unrestructured bond) and 9 million of Land of Fire.
Meanwhile, in February, half a dozen provinces needed dollars to pay the interest. Between rivers turned to its creditors $40.7 million, Neuquen others 17.2 millionfollowed by Cordoba (15.6 million), La Rioja (7.5 million), Chaco (6.2 million) there Chubut (2.4 million). In total, they added 89.6 million.
In March, in addition to the $192 million from Buenos Aires, payments of Santa Fe For $129.3 million next March 23, $58 million of Mendoza andl 19 de est mes, Jujuy For 32.1 million almost a day laterand 10 million of Black River this Friday.
The bond restructuring carried out by most of the provinces that had dollar bonds issued during the two years of the international market funding window, between 2016 and 2017, left for this year and next a payment horizon to creditors in rising provinces in the years to come.
Throughout the year, governors will pay over $1.5 trillion to the BCRA to meet their foreign currency obligations
According to data from the consulting firm Aerarium, by 2023, total turns are expected for $1,586 million for the consolidated province. Next year, the payments due are on the agenda of $2,097 millionwhile the peaks will be in 2025 and 2026, when governors will have to pay $2.645 million every year. Only in 2028 will there be a demand for foreign currency for debt payment at a level like this year.
The use of dollars to pay the foreign currency debt is one of the elements that will pressure on reserves of the Central Bank. A report by the Congressional Budget Office (OPC) estimates that the national state will have to pay some $3.660 million in interest on its dollar obligations by 2023. There will also be payments to international organizations for $3,150 million , plus $20.222 million to the IMF, most of which — but not all, as in 2022 — will be covered by the organization’s own disbursements.
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