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2mo ago

Argentina Central Bank Plans Intraday Liquidity Session as Banks Seek Daylong Funding Window

The session will introduce market-based pricing for idle bank balances following the LEFI phase-out that flooded the system with 10 trillion pesos.

El Banco Central en medio del desarme de las LEFI y sus conscuencias
Entidades bancarias estarían pidiendo al BCRA algunos cambios para el manejo de liquidez, tras el fin de las LEFIs.
Santiago Bausili defendió el fin de las LEFI.
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Overview

  • The BCRA has begun collaborating with market participants to establish an intraday liquidity trading session that will assign a price to excess deposits.
  • Through their association Adeba, banks formally requested an intraday funding window until 6 p.m. secured by public securities to cover short-term cash mismatches.
  • In their petition, banks also asked to exempt Letras Capitalizables maturing in under 90 days from public-sector exposure limits and to count end-of-day surpluses toward the next business day.
  • On July 10 the Treasury issued 4.7 trillion pesos in debt to absorb the surplus liquidity unleashed by the LEFI phase-out.
  • Banks held some 15.8 trillion pesos in idle balances after previous monetary expansions, a legacy that had elevated interest rates and intensified peso-dollar pressures.