Radiography of measures announced by Lacunza: What is reperfilation?

After the second day of financial storm, where the Central Bank has spent more than $ 650 million in research to contain foreign exchange and exchange rate pressures also jumped 3 pesos in its listing, The finance minister's press conference was faced with uncertainty over the use of foreign exchange reserves, public debt maturities and the IMF's forthcoming disbursement.

The measures began during the day yesterday, when the Central Bank announced the limitation of the peso financing of the major exporters. The intention is that it forces exporters to liquidate dollars, in the absence of pesos, and thus to strengthen the green supply in order to ease the tensions on exchange rates. A measure that could have been very effective in the past but, in this context, its impact becomes questionable. he timing It has been a problem of this government.

Measures

The advertisements concern four points:

1. Extend the duration of short-term debt (LETES, LECAP, LECER and LELINK) for institutions and not for individuals.
2. To send to Congress a "bill to incorporate in public titles collective action clauses allowing an orderly reconstitution of the expiry dates".
3. Extend the maturities of foreign securities, for which "the Ministry of Finance will contact international banks to receive proposals for mapping and execution of a re-inflation of public securities governed by external jurisdictions that expire in the next 10 years ".
4. Start discussions with the IMF to extend the deadlines.

Fundamentally The need to extend the maturity of the public debt in the short, medium and long term has been communicated.

By default selective

In technical terms, a fault is the breach of legal obligations or the terms of a loan. In this sense, there is a breach of the terms agreed upon for institutions that have subscribed to treasury bills.

Now, that does not mean the cessation of payments. This is important and that is why this new word has been used: reperfilation. For the moment The only sure thing, since the rest has to go through Congress and by the foreign bank and IMF negotiating table, is the extension of Treasury bills expiry, with no withdrawal of capital.

IMF

In view of all these measures, the Fund, our main creditor, agreed to make a brief statement We are not talking about the next disbursement of $ 5.4 billion, but he announces that what will happen in our country will continue to be close.

At this stage, It is important to remember that Argentina concentrates 63% of the IMF's portfolio. Under the direction of Christine Lagarde, the most important agreement signed with the agency, which has already disbursed 80% of the total amount, was signed with an economy that continues to fall, That's why what is said on both sides of the counter is so important.

Market reading

Several measures can be performed on the measurements, whichAlthough this is a change in the terms of the debt, it does not speak of withdrawal of capital but of extension of the payment period in search of the protection of the international reserves of the low roll over that there was

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In this direction, This poses a challenge for the next direction as it accumulates the due dates for 2020 and therefore its payment would be the responsibility of a future government. Anyway, gives an overview of the current deadlines that have endangered the country's reserves, which have already been reduced by more than $ 10 billion this month.