More time to take advantage of the dollar's decline and enter Letes

With a bearish mood in the swap, the Department of Finance and Finance decided to give more time to investors to buy Treasury bills and take advantage of dollarization at a more advantageous exchange rate. The portfolio led by Nicolas Dujovne announced yesterday that it was extending until the deadline for subscription Letes in dollars due on July 26, 2019.

On Monday, the Treasury had called a call for funds. Letes offers without specifying the amount of dollars you would look for or the rate you would pay. The only thing that was clear was the subscription change rate that was set at $ 28.7217, according to the Central Bank's "A" 3500 communication (BCRA) on the first day of the week. This dollar price comes from a wholesale average made by the monetary authority.

The "A" 3500 dollar had failed to capture the decline suffered by the currency quote at the end of the first day of the week, as a result of Dujovne's statements in front of the investors of the day. outside and the rise of the reserves. Therefore, it was a very high entry point for dollarizing with Letes: who wanted to subscribe with pesos got less dollars. By contrast, yesterday it has dropped and is expected to decline further today, when the exchange rate of the subscription will be set for tomorrow.

"It was not practical to enter the exchange rate set Monday after the fall of the dollar.the second half of the wheel today (yesterday) the exchange rate of communication "A" 3500 closed at 27.9417, ie, 2.72% below yesterday, "explained Nery Persichini, director of investments at GMA Capital

On the market, they said that the term "extension" could be linked to a lack of interest on the part of investors. Regarding the postponement of the subscription, Mateo Reschini, LBO market badyst, said: "This could have been requested because the" A "3500 dollars to bid in pesos and also to Lebac was very high. they did not supplement what they wanted, either because the subscription dollar was high, or because they were expecting a bear market. "

Regarding The exchange of Letes for Lebac (July, August, September and October) On Monday, the Treasury reported the price at which they would take the letters from the BCRA. This value implied rates slightly lower than today on the secondary market. However, with the extension of the term, the ministry warned that the prices of the subscription with acceptable Lebac will be communicated "before the opening of the markets next Thursday, July 5."

Yesterday, Lebac rates in the secondary market rose to 61% levels for which it expires this month. The rest, meanwhile, was 53.10%, 50.25%, 48.50%, 47.50% for letters due in August, September, October, November and December. The increase in yields (and the consequent decline in price) was related to the disarming of positions in banks that needed liquidity to comply with the new reserve regulations. The BCRA saved $ 5,000 million in letters in July and placed $ 2,000 million in the same terms in August, September and October, at rates of 51%, 50% and 49%, respectively

. in the form of delivery of the Lebac, which will be made on Wednesday, July 11, 2018. In case of default of subscription with Lebac, the settlement will be carried out on Thursday 12 at the debit of the corresponding effective value of the current account in dollars of the participating financial institution in the BCRA.