July Looks Set to be a Quiet Month for the Treasury
After a busy June, July is shaping up to be a much lighter month for the Treasury, with only two repayment lines to settle:
- BTC 52 weeks 16/07/2024: 1,000 billion MTnd
- BTC 26 weeks 26/07/2022: 90 billion MTnd
As a result, we can expect a single major withdrawal this month to cover the key July deadline. It is highly likely that this will take the form of BTCT, as we have seen in similar operations. However, it would be preferable to issue BTA instead, which would help alleviate pressure on 2025, which is already packed with deadlines.
The problem is that subscribers are placing themselves in a short-term investment horizon. Although there are no signs of an imminent drop in interest rates, the preference remains for short-term maturities, i.e., BTCT. BTA, which offers a tax advantage to individual investors, seems to be being replaced by national bond obligations.
Meanwhile, we believe that the third tranche of the national bond will be issued in September. With the summer vacation season, market dynamics tend to slow down. Furthermore, public finances are holding up well and have a direct financing line with the Central Bank in case of emergency. The terms will be set in August, with resource mobilization to be triggered in the fall.
On the external debt front, July is looking very calm. The non-exhaustive list includes two deadlines with the IMF (90 million USD under the rapid financing mechanism and 25.6 million USD for the last financing obtained in 2016), a tranche of the Saudi loan (50 million USD), and a tranche of the Arab Monetary Fund credit (12 million USD). In total, this amounts to 177.6 million USD, a sum that is easily manageable.
