The Treasury surprised with a debt buyback and the BCRA accelerated dollar accumulation: what it means for interest rates

Purchases in the Foreign Exchange Market (MLC), which were record-breaking this week in several months, poured liquidity into the system, but, as Wednesday's auction yielded a rollover of 136%, speculation arose in the city that interest rates would spike due to a dry peso market. However, in recent hours it was confirmed that the Treasury had previously repurchased debt for a significant amount, in an operation that partially offset the absorption of pesos from the auction.{#p-1792191807973-84956}

This week, the national Treasury used pesos to repurchase its own debt securities, specifically the Lecap maturing in November 2026 and the Boncap maturing in March 2027, directly in the financial market. This was confirmed by 1816: "An adjustment of listed amounts from BYMA published this morning confirmed that the Treasury repurchased S13N6 and TMG27 on Wednesday in T+1".{#p-1792191807973-48162}

It was an operation worth $662 billion in total effective value - about $458 billion of TMG27 and $204 billion of S13N6 - carried out on Wednesday in the Bilateral PPT wheel of A3. The buyback injected liquidity on Thursday, when the BCRA took $2 trillion in the REPO wheel. Conversely, the liquidation of Wednesday's auction implied a projected absorption of around $1.7 trillion this Friday.{#p-1792191807973-79160}

On the other hand, the Government had informed Bloomberg Línea that it conducted expansive open market operations for about $1 trillion. Given that difference, 1816 noted that it could not be ruled out that the Treasury had conducted another buyback outside regulated markets, in addition to the confirmed operations with S13N6 and TMG27.{#p-1792191807973-82518}

In this regard, 1816 warned that when the stock of REPO taken by the Central Bank falls below $1 trillion, the lack of liquidity is usually felt in the rates. "The monetary authority has the power to eventually halt any movement (just as it always takes Pesos at 20% in REPO, it could also offer pesos at, say, 24%), but the endogenous rate scheme makes the economic team usually prefer to influence rates indirectly," they expanded.{#p-1792191807973-14049}

"What happens with the rates? What does the economic team want to do with them? Did you see that they suddenly contracted $1.8 trillion?" asked an analyst from the city in dialogue with Ámbito, recounting what happened this week: "Everyone thinks that rates are going to spike, and then you find out that there was an operation where the Treasury would have repurchased its securities with pesos that the BCRA had the day before. So, with that, they prevent rates from spiking."{#p-1792191807973-73750}

That is to say, according to speculation in the city, the outcome of the auction responded to the fact that they already knew that they had made that buyback. Consequently, experts maintain that there is quite a bit of opacity regarding the rates, something that bothers the market. But the underlying message remains that the economic team will not want rates to spike, especially with a stable dollar.{#p-1792191807973-78607}

The BCRA also accelerated the purchase of foreign currencies, but the auction absorbed pesos {#p-1792191807973-42899}

To measure monetary expansion, the latest foreign currency purchases made by the BCRA must also be taken into account. After a poor September, October started with a different tone: in the last four sessions, the monetary entity acquired $642 million, which also injected pesos into the system - almost $1 trillion -.{#p-1792191807973-58115}

This change in foreign currency purchases was also reflected by Grupo SBS: "The BCRA accelerated its buying pace markedly: after accumulating $340 million until Friday, on Tuesday it acquired $291 million in a single session, the largest purchase since July 24," while between Wednesday and Friday it added another $381 million, bringing the monthly total to $982 million, above the $473 million for all of September.{#p-1792191807973-20447}

As mentioned, Wednesday saw the second auction of peso debt for the month. Given relatively low maturities, of about $4.85 trillion, the rollover was 136.14%, with an absorption of pesos of around $1.75 trillion. Thus, part of the pesos poured in by the BCRA in recent sessions, where it accelerated the pace of dollar purchases in the MLC, and the Treasury's buybacks were sterilized. These injections reduced the impact of the auction's absorption.{#p-1792191807973-98671}

Returning to reserves, the accumulated purchases in 2026 have already exceeded $15.5 billion and gross reserves closed the week at $50.236 billion. "The turn is constructive: the combination of a stable dollar, a narrowed gap, and rising accumulation is exactly what the market asks for to think about the stock of natural resources with which 2027 will be faced, which, we reiterate, will be one of the key variables to monitor in the coming months."{#p-1792191807973-76094}

Regarding what will happen, Grupo SBS stated that the pace will depend on the balance between supply and demand sources and that the expansion of pesos via foreign currency purchases in the MLC must be closely monitored in terms of liquidity. This is because the real demand for money still does not show a decided upward dynamic, so the Treasury's auctions could take on a more relevant sterilization role.{#p-1792191807973-25478}

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