A man wearing a cap that says "Make Argentina Great Again" smiles in a meeting room with an Argentine flag and a painting on the wall. — The government absorbed 4.7 trillion pesos (10.36 billion pounds) to reduce the circulation of money | La Derecha Diario

Camara — The government absorbed 4.7 trillion pesos (10.36 billion pounds) to reduce the circulation of money | La Derecha Diario

The Government absorbed 4.7 trillion pesos ($4.7 trillion) to reduce the circulation of money.

In a coordinated strategy with the BCRA, the government raises interest rates and withdraws pesos from the market

16/07/2025 17:06:00h

Editorial Team

With the aim of containing pressure on the dollar following the unwinding of the Central Bank's Fiscal Bills, the national government absorbed 4.7 trillion pesos (10.36 billion pounds) this Wednesday through the issuance of short-term local currency debt securities. The measure seeks to withdraw part of the pesos that had remained in circulation, which threatened to generate greater exchange rate instability.

Two men in suits sitting at a table during a press conference with an Argentine flag in the background and water bottles on the table

Luis Caputo together with Pablo Quirno | La Derecha Diario

The auction was carried out by the Ministry of Economy, led by Luis Caputo, through the Finance Secretariat headed by Pablo Quirno. This was an extraordinary operation, outside the usual schedule, and is part of a series of actions aimed at maintaining monetary balance without resorting to issuance.

"The Ministry of Economy issued 4.7 trillion pesos (10.36 billion pounds) in short-term local currency securities this Wednesday to absorb the pesos that had been left loose in the market after the unwinding of the LeFi and that threatened to put pressure on the exchange rate", the economic ministry officially announced.

According to market estimates, the end of the Fiscal Bills had released about 10 trillion pesos (22.05 billion pounds), which caused a drop in local currency rates and an upward movement in the dollar's exchange rate. To neutralize this effect, the economic team implemented a set of tools that included passive repos, operations with dollar futures, and the issuance of Treasury Capitalizable Bills.

The largest portion of the amount awarded in the auction was concentrated in the Lecapmaturing on July 31, for approximately 1.5 trillion pesos (3.31 billion pounds). Securities maturing in August were also awarded — for 816 billion pesos (1.8 billion pounds) in the middle of the month and 865 billion pesos (1.91 billion pounds) toward the end of the same month — and another 776 billion pesos (1.71 billion pounds) maturing in September.

Two men pose for a selfie in an office with an Argentine flag and a painting in the background.

Javier Milei together with Luis Caputo - Minister of Economy of the Argentine Nation | La Derecha Diario

The Ministry of Economy awarded 4.7 trillion pesos (10.36 billion pounds) in Capitalizable Bills (Lecaps)and Capitalizable Bonds (Boncaps), raising interest rates to ensure the full absorption of the excess pesos released after the elimination of the Central Bank's Fiscal Bills (LeFis). The operation is part of the monetary control scheme and coordination between the Treasury and the BCRA.

"The Treasury absorbs 4.7 trillion pesos (10.36 billion pounds) in the Lecaps/Boncaps auction in the context of the unwinding of the LeFis. The excess pesos left by the unwinding of LeFis are eliminated (endogenous rate) with an extension of duration in the Finance maturity profile", explained Federico Furiase, director of the Central Bank.

According to market sources, the economic team validated rates higher than those traded in the secondary market to guarantee the full absorption of liquidity. The measure was interpreted as a gesture of technical consistency in the face of the challenge of sterilizing funds without resorting to issuance.

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