Despite the swap that was closed with the creditors, the total national public debt continues to rise. In pesos and in foreign currency it amounted to US $ 332,185 million as of September 30. They are US $ 9,121 million more than the US $ 323,064 million registered at the end of December 2019, according to data from the Ministry of Finance.
A large part of the increase in debt is explained by the greater “transitory advances” from the Central Bank to the National Government aside from transfers from the BCRA to the Treasury for accounting profits from the devaluation of the peso. Temporary advances, such as debt, and transfers of profits, such as Treasury income, they help finance the huge fiscal deficit.
For example, according to the Congressional Budget Office (OPC), “During September, the stock of temporary advances increased by $ 61.5 billion, totaling $ 1,386,230 million at the end of the month ”. At the end of December 2019, the stock was $ 852,730 million. In pesos, an increase of 62.5%, for $ 533,500 million, equivalent to about US $ 7,000 million.
On Friday, the Central Bank reported that so far this month of October, the Treasury reduced the temporary advances by $ 8,080 million obtained as financing from the BCRA. “The Treasury reduced $ 2,050 million until October 15, and today (for Friday) it paid an additional $ 6,030 million more,” the statement said.
For its part, the restructuring generated a rise in debt of about US $ 1 billion. According to the OPC, “the bondholders that entered the exchange in the late accession period were recognized running interest on their eligible bonds until April 6, through the delivery of bonds in the same currency as the chosen securities. Considering both instances – early and late – the issuance of bonds for recognition of running interest offset the nominal deduction applicable for some securities, with which the operation resulted in a net increase of around US $ 1 billion in the total stock of outstanding securities “.
In counterpart, Due to the rise in the dollar, part of the debt in pesos was liquefied in dollars.
Because, Guido Lorenzo, from the LCG consulting firm, points out that “the capital reduction was minimal and the interest accrued on the date of the exchange was capitalized. It was an exchange of terms”. And it highlights that “not only the Treasury has more debt, the most worrying thing arises from the BCRA’s equity situation. If one looks at the remunerated liabilities of the BCRA they doubled in October 2020 compared to December 10, 2019. They already reach $ 2.5 trillion pesos. These liabilities pay an interest rate that generates an endogenous source of emission that implied an expansion of the monetary base of $ 550,000 million in interest in that period of time. So, the interests of the Leliq and Pases exceeded the pension payments ”.
Jorge Neyro, from the ACM consulting firm, highlights that the gross public debt in dollars reached US $ 332,185 million at the end of September, growing by US $ 8,930 million in the last six months.
“Behind this rise in debt, there are the largest placements of securities (US $ 8,320 million), loans with international organizations (US $ 553 million) and the temporary advances that the BCRA granted to the government (US $ 4,326 million between April and September). Valuation effects subtracted US $ 4,300 million approximately in the period, “he explained.
According to the economist, neither the local nor the international swap implied substantive debt reductions, so the debt level did not change for this reason. “It is also important to note that the debt with the BCRA does not accrue interest, so it is financing at no cost to the Government, which reduces its value in dollars as the peso depreciates.”