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BCRA will assist the government with US$4.5 billion
Ambito Financiero
July 11, 2008

To be able to cover part of its financial needs through 2010, the government will count on the extraordinary assistance of the BCRA, which in 2008 could transfer US$4.5 billion in its holdings and US$5 billion in 2009, when the amount in the last few years was placed at US$1.1 billion. So says a private report from an important consultant in its last weekly evaluation, in which it also estimates that the gap that the government will have to cover will be US$4.181 billion for this year and US$7.623 billion next year.

From where will the government of Cristina de Kirchner obtain the necessary funds to govern that gap between financial obligations and sources? According to the report, also from the larger holdings that the BCRA will transfer, the government could turn to three known instruments:

Emission of Treasury Letters, which in 2008 totalled US$918 million and in 2009 US$758 million.

Increasing the total titles places at ANSeS, which is estimated at US$1.045 billion for this year and US$1.775 billion for next year.

Placement of new debt in Venezuela and on the market, which in 2008 will be US$2.262 billion and in 2009 US$5.250 billion. For this year, the consultant estimates that the interest due will generate obligations of US$5.646 billion and the principal due will generate US$9.760 billion. At the same time, the usual sources of financing will come to US$13.140 billion in 2008 and US$12.781 billion in 2009. There is an estimate for the non-finance public sector at 3.2% of GDP that will repeat over both years. But as the amount generated by these sources is lower than the total obligations, it generates a financial gap that has to be settled through extraordinary means like the direct emissions to ANSeS, the Letters, the placement of debt on the market and the larger holdings transferred by the BCRA, headed by Mart n Redrado.