In the midst of an environment of high fiscal uncertainty, the Colombian government enlists an unprecedented financial maneuver with which it seeks to create a “strategic liquidity reserve” for at least $ 20 billion, and even more, Through the hiring of an external loan called in Swiss francs, which represents risks of various kinds that must be taken into account, according to Corficolombiana analysts.
The strategy, led by the Ministry of Finance, seeks to mitigate short -term tensions in the financing of the State without resorting to additional TES emissions, taking into account the high interest that They begin to pay in the local market and the possibility of going down the appetite for these assets.
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Although the intention is good, like all delicate surgery, this intervention also drags risks that disturb analysts such as refinancing, exchange volatility, market distortions and political discretion. It could be interpreted as a kind of commitment to “double or nothing”, which could go well, if you have fiscal discipline and all the factors needed by the government.
A complex operation to relieve tensions
The basis of the strategy consists in guaranteeing a portfolio of assets that comprise titles, TCO (in the short term) or global bonds, to support a loan in foreign currency, whose disbursement would be made in dollars but whose final obligation would be counted in Swiss francs.
With these resources, the government would not only ensure immediate liquidity to attend close maturities, but would seek to acquire titles in the secondary market with discount, to keep them as strategic asset of the nation.
Risks and fiscal crisis of the economy.
Image generated with artificial intelligence – chatgpt
As explained in several moments the public credit directorJavier Cuéllar, it is an innovation within the State’s financing plans, given that the operation, still under evaluation, aims to diversify debt sources, reduce exposure to the dollar and take advantage of the lowest rates offered by the Swiss Franco, at a time when the cost of financing in traditional markets has increased.
First risk: refinancing
At first glance, the credit projected for US $ 10,000 million would allow the government to gain time without resorting to additional internal debt emissions. However, that respite can be short if it is taken into account that the operation would be agreed for a year, that is, its expiration would occur under the following government, which will be chosen in 2026.
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Although there is talk of an initial figure close to $ 20 billion, from the Ministry of Finance it is not ruled out that the amount even reaches $ 40 billion; that if completed, the temptation to resort to refinancing or rollover increases; since otherwise strong pressures would be generated in the national budget spending accounts.
Corficolombiana analysts explain that this mechanism has two problems, starting because it moves the weight of the decision to another government and exposes the country to still unknown market conditions, since although today it is estimated that the interest rate would be around 1%, there is no guarantee that this cost is maintained in a year.
Fiscal Risks – Economy.
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Second risk: exchange market
Starting from the fact that the currency in which a debt matters as much as its amount, In this part, it must be said that the credit is acquired in Swiss francs, but the disbursement would be received in dollars, generating a structure that introduces a exchange risk in which on the one hand, it is necessary to monitor the price of the Swiss Franco against the dollar to calculate the true load of the debt.
Likewise, any variation in the exchange rate between dollars and pesos when making payments can alter the national budget. Although Switzerland offers a stable economic environment, with inflation below 3% and traditionally low interest rates, it is not immune to external shocks.
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Here it must be said that the commercial war between the United States and its partners, instability in oil markets and the threat of a new inflation cycle in Europe could affect the value of the Swiss currency or raise your interest rates, compromising the initially projected savings.
In addition, every time the government has to convert pesos to dollars, or vice versa, to meet payments of this debt, there is a risk of altering the internal exchange market, moved by supply and demand dynamics and could lead to distortions that affect other sectors sensitive to the exchange rate, such as importers or foreign trade.
Swiss Franco
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THIRD RISK: THE TES BONDS
One of the central elements of the scheme is the use of credit for purchaser Government’s own debt titles, global TCOS and bonds in the secondary market, and according to the information that has circulated among market creators, the intention is to take advantage of current low prices to acquire these discount titles, such as a lifeguard or an asset that could be available later.
It should be noted that from the financial point of view, this could generate a profitability that facilitates the payment of the contracted credit, but the movement does not cease to have a speculative component, since it is committed to the economic environment will improve enough so that the prices of the titles rise and if that does not happen, the operation could become a loss or additional load for public finances.
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In addition, Corficolombiana analysts warn that a massive intervention by the Ministry of Finance in the secondary market of TES could generate significant distortions. Large purchase movements can alter reference prices, Difficult market reading and send confusing signals to institutional investors.
Fourth Risk: All at discretion
One of the aspects that most worries the experts consulted is that there is no legal obligation on the final destination of the resources obtained through this operation and although the official discourse speaks of constituting a strategic reserve by buying titles, in practice the Government could use the money for other purposes, as deemed convenient.
Presentation Fiscal Framework of the Medium Term 2025 – 2035.
Photo: CEET – Néstor Gómez
This degree of discretion not only generates uncertainty, but it increases The need to guarantee a rigorous use of these resources, especially in a pre -election context. After all, 2026 will be a year of presidential transition, and both the creation of the reservation and its management will fall on the incoming administration.
Thus, the operation resembles what in personal finances is known as paying a rotating loan with another. Although it releases box in the short term, it does not solve the underlying problem, which are the inflexibility of public spending, structurally insufficient tax revenues and the need for sustainable fiscal reform.
Everything is subject to the discipline of the government on duty and to the surveillance of control and congress agencies.
Daniel Hernández Naranjo,
Portfolio journalist
