CB gets ARG$700 ML all the same

On Tuesday, Argentine Central Bank received almost four times the amount of Bills of Exchange and Securities. In view of such fund over-bid, agreed rates remained stable and in some medium-term issues, they posted a slight fall.

This allowed the entity managed by Martín Redrado to withdraw from financial market more than ARG$700 millions, favouring compliance with monetary program goals. 79 per cent of proposals accepted by Central Bank went to fixed rate instrument segment and the rest to variable rate one.

Contradiction

Tender operations contradicted financial market ones where fund demand intensified and interbank rates stability was kept in view of greater needs for the end of the month and July first fortnight. Analysts warn that a careful study of Central Bank tender results should be carried out, since, during the first fortnight of July, almost ARG$2.5 billions of LEBAC and NOBAC (Argentine Central Bank's Bills of Exchange and Securities) expire.

On Tuesday, short-term interbank rates remained around 9 per cent annual, while 9.5 per cent was paid for one-month term.

As regards maturities, it is worth mentioning that total LEBAC stock issued by Central Bank settles at ARG$ 10 billions and there are other ARG$21 billions in NOBAC.

Main data from Tuesday's bid is provided below:

Bidden amount was ARG$1.1 billion against maturities for ARG$ 333 millions. Central Bank awarded ARG$1 billion in Argentine pesos at fixed rate and ARG$214 millions at variable rate.

Out of the ARG$1.1 billion bidden, ARG$802 millions sought issues in Argentine pesos at fixed rate and ARG$347 at variable rate.

Rate of LEBAC payable at 77 days remained unchanged at 7.35 per cent annual as well as 175-day yield (8.6 per cent). 343-day rate continued at 12 per cent.

259-day LEBAC had a 10.20-per cent rate (formerly, 10.27 per cent).

As regards NOBAC in Argentine pesos adjusted by BADLAR rate (for private deposits at 35 days for more than 1 million), one-year-term security spread dipped from 2.05 per cent to 2.03 per cent and for two-year-term security, the differential moved from 3.78 per cent to 3.72 per cent.

Great lack of interest in placing funds in bills of exchange in longer terms was observed since 504-day and 686-day drafts had no bids.