The weight vacuum cleaner still on: no matter how much the Government proclaims that the public’s demand for money is recovering, the truth is that, in each Treasury tender, it is not content with renewing debt maturities, but rather places a surplus of bonds to get more pesos out of circulation.
This Wednesday’s tender was no exception: $7.8 billion worth of securities were duebut the Secretary of Finance, Federico Furiase, It also issued bonds for a surplus of $2.1 billion. In short, a “rollover” of 127%.
And for the Government, the fact that investors have offered him $11.8 billion. In the market, this fact is interpreted as a sign that there is still room for a fall in interest rates.
In fact, The Lecap rate maturing in August yields 2% effective monthly and 26.8 effective annuallywhich implies an improvement compared to the result of two weeks ago, when most of the demand had focused on papers that left 29% effective annually.
The signals left by the Government after a new key tender
This downward trend in rates allows the government to refute the argument that exchange rate stability is being based on an excessive “carry trade” mechanism. In fact, the exchange rate has not suffered upward pressure even though bonds with lower yields are issued in each tender.
But, perhaps more than the compression of interest rates, What the Government is celebrating most intensely is the fact that expiration dates were extended until dates after next year’s presidential election.
Was bond issues totaling $2.7 trillion with maturity in 2028. And, in addition, to that is added the conversion of “dollar linked” securities for $15.6 billion that also passed their maturity in 2028.
This implies the decompression of possible devaluation pressures for the electoral year. Not by chance, Javier Milei himself retweeted the result of the tenderand accompanied the figures with their classic acronyms of “Everything Marches According to the Plan”, “Make Argentina Great Again” and the inevitable VLLC.
Regarding the segment of the debt in dollarsthe government also had a good result: managed to raise US$300 milliondespite having offered securities at lower interest rates than in the previous tender.
And the data of the difference in acceptance between the bonus payable in 2027 and that of 2028 stood out again: between both, an additional 3.39 rate points.
The tender will be completed on Thursday “hard dollar“, in which the Treasury will try to capture other US$200 million, something that was not achieved in the previous tender.
Milei’s previous definition: “The demand for money began to grow”
The tender came a day after the overwhelming Javier Milei’s definitions about inflation. In the Amcham Sumit, among other things, the President assured that the CPI will tend to fall because “the demand for money has begun to grow”
“In March, what has to do with the war had an impact. And obviously, due to a seasonal issue, meat and Education. That is what this jump in the inflation rate implies. We are purging what was the fall in the demand for money in the second half of 2025 and the specific effect. This is not inflation, The price level jumped, but inflation has long converged to the international level. The long-term balance that we are looking for has not changed. What changed is how it moves in time. It is a very important first point. If we take the basic food basket, it is at 2.2%. Or the total basic basket 2.6%. The effect of education, war and meat is clear,” said the President.
“Once these effects are overcome, the inflation rate will fall. But if you look at wholesale inflation, which is what is anticipated, it travels around 0.8 and 1%. That indicates that it will travel around 10%. We have to finish accommodating the relative prices and it will converge. You have to be patient, not despair. When you get desperate you make bad decisions. “We are not going to change our economic policy.”he stressed.
“I have another good news: the demand for money has started to grow.”he added as another factor. ““Today the Central Bank bought US$180 million”he added. “If we look at the collection data for March, activity began to recover. If we look at the GDP data, we are at an activity record, a consumption record. Credit is growing. We begin to rebuild working capital. When it recovers, Argentina grows again. Inflation is going to collapse and Argentina is going to recover the growth path that we had before the political attack,” he stressed.
“Inflation leads nowhere but to Hell. We do not have to resign ourselves to having inflation, it is false,” he concluded.
“We are going to take all the pesos off the street until inflation collapses. We are not going to give in on monetary policy. We are not going to give in to continue deregulating. We are going to continue opening the economy, because when they open the economy it expands. “We did not come to remain in power forever, we came to write the best page in Argentine history,” he said.
