Perfil (Sabado)

Dollar rollercoas­ter, debt rollover

ECONOMY

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While the “blue” parallel dollar has been bouncing around on either side of 350 pesos in the early days of 2023, the government carried out behind the scenes a major bond swap to kick ahead the debt payments falling due this quarter.

Those entering the swap were given a choice of three alternativ­es – a fixed interest rate, dollarlink­ed or index-linked, whichever suits the creditor most. While repayment stretches over 13 months, the bulk will fall due in the third quarter of this year. Bond-holders (including some major banks) made over 1,000 offers – enough to slash almost three trillion pesos off this quarter’s repayments or two-thirds, according to the calculatio­ns of the economic team. But three-quarters of the offers opted for the dollar-linked or index-linked alternativ­es, thus showing a lack of confidence.

The swap, the third under Economy Minister Sergio Massa and the 13th of the Frente de Todos administra­tion, was considered a success but in the third quarter no further rollover will be possible without opposition endorsemen­t as the potential future government.

On the last Wednesday of 2022, the government had an even bigger success on the domestic debt front – needing to pay off 475 billion pesos, its tender raised 1.1 trillion pesos or well over twice the required sum, leaving a huge extra to cover the fiscal deficit. But financial experts suggested that this exaggerate­d liquidity was the consequenc­e of all the money printed to pay for the second round of the “soy dollar” and to meet end-of-the-year commitment­s.

That “soy dollar” round topped the target of US$3 billion by some US$154 million while the farm sector brought in a record US$40.438 billion in the course of 2022, 22 percent more than in the previous year (US$32.8 billion). A persistent drought raises doubts as to whether that record will be beaten this year (even though there was some rainfall around the turn of the year) while sales of agricultur­al machinery were estimated to have fallen 20 percent last year. To buy the second round of soy dollars 582 billion pesos had to be printed as against 1.1 trillion pesos for the first round last September. On the negative side of the trade ledger importers ended the year owing US$7.3 billion abroad.

Meanwhile AFIP tax bureau reported revenue up 95.6 percent last month from the previous December at 2.3 trillion pesos for a total 2022 tax haul of almost 20 trillion pesos, 81.6 percent higher than 2021. Last year’s tax burden amounted to 23.8 percent of gross domestic product, 0.12 percent of GDP higher than in 2021. The year closed with most consultant­s forecastin­g that 2022 inflation would be just below the three digits once feared.

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