Three challenges for the first 100 days of government

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Three challenges for the first 100 days of government

Second week
October 2019

The government that will take office on December 10th will face a demanding debt maturity schedule during its first 100 days in power, but it will also have to finance December’s primary deficit, which is high due to seasonal factors. Even using all the dollars which correspond to “reserve strengthening” by the end of the year, the first challenge will be to meet this year’s financial program. Although the amount of dollars suffices until the end of the year, the Treasury has a shortage of pesos that it will not be able to cover due to the lack of voluntary financing, not even by selling those remaining dollars. That is why the Treasury is very likely to resort to the CB for financing in pesos in December to cover a part of the primary expenditure during said month, presumably through an extension of temporary advances.