Buenos Aires, November 25 (NA) -- The economic team will hold a peso-denominated debt auction on Wednesday to refinance maturities worth 14.5 trillion pesos. The menu offered by the Secretariat of Finance consists of peso and dollar-denominated bonds, with the main objective of extending maturities and reducing interest rates. Given the volume to be refinanced, market operators will closely observe what rollover the economic leadership accepts. The signal of how much money is taken and at what interest rate will define the peso market for the coming weeks. A financing rate below 100% will force the National Treasury to pay the difference in cash, releasing more pesos into the market. In parallel, this money will reduce the amount the National Treasury has in its account at the Central Bank, currently around 4.5 trillion pesos, as reported by the Argentine News Agency based on official data. To ease the weight of the auction, last week the Central Bank and the National Treasury conducted a bond swap that eased maturities by about 2 trillion pesos. Additionally, the Central Bank reduced the reference interest rate it pays to banks to 20%, in order to force a reduction in the yields that will be required to lend the necessary funds. Likewise, the Central Bank has relaxed bank reserve requirements, which improves liquidity and gives banks more room to go to the auction without needing to demand cash.
