The start of phase 2 of the economic plan began with a strong move by the banks. After the announcement last Friday of the plan to transfer the Central Bank’s debt to the Treasury, private financial institutions on Monday got rid of part of the passive repos and the stock of that debt issued by the Central Bank fell by almost 30% in a single day, a drop of unusual magnitude.
The passes are the remunerated liabilities (exLeliq) that Javier Milei and Luis Caputo seek to eliminate in order to lift the restriction. These are securities that the BCRA uses to absorb the monetary surplus and the banks buy to obtain a return on savers’ deposits. The Minister of Economy announced on Friday that they were going to speed up their transfer to the Treasury by issuing new Treasury bills (Leremo) and on Monday he informed the banks of this.
Amid the negative reaction of the markets that led to the rise of financial dollars and the fall of stocks and bonds on Monday, the stock of passes was reduced from $16 to $11 billion, a $5 billion drop that was explained by the $3.5 trillion dismantling of public banks and $1.5 trillion of private banks. The Central Bank explained that the drop was due to “normal movements” at the beginning of the month to meet their needs.
Although entities usually reduce repo operations at the beginning of the month and before the weekends, banks recognize that there are expectations for the lyrics that Caputo will release in the next few hours with the guarantee of the BCRA. They want to see if the bonds will not pay Gross Income and they will be able to capture “higher rates”, as promised by the minister.