Tomorrow he has to pay the interest on the Par bond, both local and foreign law, for around $ 250 million. But the strategy to use reserves is exhausted
And the Bookings held by the BCRA, US $ 1,053 million have fallen so far this month, going from US $ 44,788 million to the current US $ 43,735 million. Be that as it may, for now, the debt will be paid: the government published the “payment notice” on March 27 on the corresponding platforms so that investors wait for the coupons to be accredited.
But forward, as the minister already warned Martín Guzmán, the payment of the debt in dollars will be under discussion.
The official during his presentation a few weeks ago slipped: “The country has continued paying interest in foreign currency with reserves of central bank until the formal start of the restructuring process with an exchange offer. This shows Argentina’s commitment to have a path towards sustainable debt and its preference to do so in an orderly manner. But we have already reached a limit of the use of reserves to pay debt in foreign currency. We can’t keep doing it“
In February, the interventions in the exchange market by the Central were negative. He had to sell around u $ s260 million while so far in March (official information until 20) he has 150 million as a selling balance.
In other words, not only do they have to sell reserves to pay the debt, but they also loose (few) dollars to supply the foreign exchange market that operates with an ultra stocks. Of course, it does so by raising the price to, at least, generate a rise in the exchange rate in the midst of the avalanche of devaluations that is happening in the world (and that the peso knows little and nothing about the mega controls).
The Government knows that if a quick debt settlement does not come, it will not be able to continue “raffling” dollars in the market that has less and less. In fact, Guzmán’s strategy with reserves is that of “hoarding.”
That is the number “target” that Guzmán has for the coming years (until 2024), something that would give the country an exchange cushion and the ability to repay the debt. He believes that he can accumulate dollars to have $ 77 billion in ten years.
But, as the consultant 1816 warned, the Fund reaches that conclusion assuming something that will not happen: that Argentina will pay International Organizations US $ 66,000 million in the same period.
Beyond punctual payment this week, forward there are maturities that will take much more and will surely no longer be paid. In the market, the date to be monitored is May 07, the day on which the principal and interest of the AY24 for an approximate amount of u $ s3,000 million.
Personal Investment Portfolio (PPI) noted that the restructuring of debt enters a key week (or takes shape, or is postponed). “While the government is practically 100% focused on advancing the coronavirus in the country, and economic measures for the sectors most affected by the decreed isolation (which could be extended), Guzman would be talking to investors,” they say.
PPI notes that the schedule announced earlier this year is broken, but an unofficial one pointed to a restructuring proposal next week.
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