After returning to the markets with the placement of a USD 1,000 million dollar bond at an interest rate of 9.26% this Thursday Finance Minister faced another challenge in the local market: it achieved a refinancing rate of over 100% and avoided injecting pesos into the system.
The Department of Commerce originally had commitments of $40 billion, but more than half of the amount due was domestic sector debt. After a series of swaps, the amount was effectively reduced to half, leaving about $14 billion in private hands.
Once again, the economic team decided not to put pesos on the market. A total of $21.27 billion was awarded after bids were received for a total of $23.37 billion, meaning that turn around of 102.01%. “Today’s result is related to high demand for money due to the seasonality of the year-end, which creates some uncertainty in the market regarding the ability to refinance all maturities,” they commented in the official statement.
On the menu offered Finance Ministerresponsible for Leandro LewThere was a National Capitalizable Treasury Bill in Pesos (LECAP) due on April 17, May 29 and November 30, 2026; Capitalizable National Treasury Bond in Pesos (BONCAP) as of May 31, 2027.
National Treasury Bill in pesos at the Tamar rate (LETAMAR) due on August 31, 2026. National Treasury Bill in pesos adjusted by CER with a discount (LECER) as of May 29, November 30, 2026. In addition to the National Treasury Bond in pesos with zero coupon and adjusted by CER (BONCER) as of May 31, 2027 and June 30. 2028. And associated National Treasury Bill US dollars Zero coupon due April 30, 2026. For short-term LECAP due April 17, 2025, $2.72 trillion was allocated at 2.40% and 32.92% TIREA.
But analysts’ expectations were no different from what ultimately happened. “We hope that the percentage of turn around is close to 100%, it doesn’t have much more room to pay or absorb pesos. Firstly, because there are no pesos deposited with the Central Bank of the Argentine Republic (BCRA), and secondly, because we are entering a period of greater demand for pesos and therefore a decrease in demand for assets denominated in pesos.emphasized the economist from Eco Go, Lucio Garay Mendez.
He stressed that although a large part of the maturities are aimed at the fixed rate bill in April, it is necessary to pay attention to how much is invested in the remaining instruments. In particular, an inflation-adjusted bond maturing in 2028, i.e. after the end of the mandate. “It would be a sign to watch out for if they invested debt with such a maturity in pesos.”he emphasized.
After the victory in the parliamentary elections, the first call was for the Finance Minister This freed up approximately $4.5 billion, allowing tariffs to be understood. This is how the easing of the “money shortage” began, which they carried out to achieve the “controlled” dollar by October 26th. This dynamic made credit more expensive for the private sector and had broad implications for companies’ business strategy.
Since the victory of Javier Milei’s government in the parliamentary elections Interest rates fell by up to 30 percentage points. Once the election uncertainty that has led to exchange rate and currency volatility is over, the Cost of debt for companies was reduced in line with the returns of fixed deadlines and mutual funds, which today range between 20% and 30% annually.
From the end of October, the economic team took a number of measures ease the cash shortage which he had pushed through before the midterm elections. Flexibility in reserve requirements, a reduction in interest rates in recent peso debt tenders, and a controlled injection of liquidity into the market allowed for a significant reduction in percentages. In addition, the decisions were accompanied by a lower limit for investment funds to invest their funds in securities, reducing the allowable margin from 30% to 20%. This forces them to channel more of their investments into the financial system.
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