On August 15th the Executive Branch began a program to gradually eliminate the stock of debt securities issued monthly by the Central Bank (LEBAC). The government expects this financial instrument to be completely phased out by December 2018. The objective is to replace the 650 billion pesos in this bond with other financing instruments. In this sense, on Tuesday the 15th, the Central Bank tendered 32% less LEBAC than the previous month. The Executive’s intention is to eliminate all such bonds within the next 4 months.

In the next LEBAC bids, the amount offered will be less than the previous month and can only be subscribed by non-bank entities. In August, the Central Bank offered 230 billion pesos against a maturity of 330 billion pesos. The same will apply to maturities in September, October and November. This schedule will also coincide with the Treasury Bills bidding calendar in pesos that the Ministry of Finance began on August 15th.

In addition, the Central Bank will offer two financial instruments: 1-year Notes (or NOBACs) and Liquidity Bills (or LELIQs). The aim of these measures is to eliminate the stock of LEBAC in the hands of non-bank entities and to offer LEBAC holders alternative investments in local currency.