In the legendary “36 Billiards” they are preparing the Taco d’Oro for the Minister Sergio Massa. The cause of the excitement on Avenida de Mayo is understandable: in one fell swoop – the soy dollar – the head of the Economy realized the fantasy (winking at billiards lovers) of adding reserves, increasing tax collection , lower the fiscal deficit and have funds to pay bonuses or salary increases without straining the public finances. Also, he respected the Monetary Fund. It would be, if it existed, a unique case of five-cushion carom. Or a carom with 5 balls. And with $ 8.1 billion in profits. Hallelujah.
But the green cloth (A memory for the homonymous film directed by Mario David based on the novel of the unjustly forgotten Roger Plá) of the carom, was torn by so much brightness. Buy dollars for $ 200 and sell them for $ 145 meant a liability of approximately $ 2.65 billion for the Central Bank that the head of the BCRA, Miguel Ángel Pesce, in Congress, dribbled with an elegant “did not have a cost because the difference in price was covered with a Treasury bill”.
Without questioning the quality of the assets raised by the BCRA, an unknown factor appears in the memory of the official letter: what happened to the non-transferable bill of $ 9.81 billion that the government of Néstor Kirchner transferred to it in exchange for currency foreigner to pay the debt to the IMF in 2005? It was paid? Either the weather, or the customs.
But, in addition, that carom to fulfill in an almost heartbreaking way and leave certain principles of history for a better moment, has had a very strong impact on the accounts of the entity that Pesce manages. The amount? A bit of patience.
During his visit to Congress to praise the Budget 2023 project, the head of the BCRA confirmed the super-minister’s statements and reiterated to lawmakers that the numbers in the Law of Laws 2023 are correct and that inflation will be around 60%. It did not include the expected sharp decline in social spending, especially pensions.
Also, there was room to talk about what is not talked about. An opposition MP asked if there were no inconsistencies in the liquidity of the BCRA, since “since December 2019 the stock of Leliqs has increased by 825%more than 7 times, while the remunerated liability on the total of the Central Bank rose by 530%. In reality, the question was not accurate. But in the absence of the many opposing economists who watched it on TV, it was not so wrong.
Pesce argued that since inflation is higher since 2019, “if the monetary entity does not maintain the interest rates it pays for the Leliqs (over 100% per annum) there would be a liquidation of the Argentines’ savings and it would go against promoting the savings of the Argentines “. And he argued that there is no reason to compare those liabilities with the monetary base.
And it is not without reason (left or right economist, it doesn’t matter). Both the monetary base and the Leliqs are liabilities of the BCRA that should be compared to the entity’s assets, essentially reserves.
But Pesce continued: “what we have to compare is that the Argentines have savings so that our country can grow”. And, ladies and gentlemen, this is not true. That of Las Leliq, which in the middle of the election campaign Alberto Fernández promised to stop paying (to remember?) to give more money to retirees, are a consequence of the monetary issue to cover public spending. It’s not company money. It is a cost, a burden for poor management of the economy.
Leliqs are monetary absorption tools that they came to replace the Lebacs. They are used to withdraw excess pesos from the market, a product above all of the monetary question to rebalance the fiscal deficit. Case in point: due to the success of the “soybean dollar” the BCRA added another trillion (yes, with the “b”) of Leliq as it had to issue pesos to buy all those dollars and then raise the rate at least for a part. important. to the dollar, of any kind. You already know dear reader: the soybean dollar meant the issuance of nearly $ 1,000,000,000,000. So many dizzying zeros.
In truth they serve to avoid the tsunami of pesos that would flood Argentina in the repetition of our hyperinflation. For now, this is not the case. But disarming that bomb is part of the unwritten economic legend.
Therefore, when asked about the means to deactivate these monetary liabilities, the official replied that this will happen when “the economy demands credit, the capital market demands financing and that money becomes investment.” As an oracle of the City and with envy of the priestess of Delphi, he said that “it is not something that will happen spontaneously, we must develop our capital market”, he remarked to the deputies, commenting on reality again instead of trying to change it.
Beyond the recognized technical solvency, Pesce should know that this debt (which is Leliq’s) is structurally priceless and can become a much greater danger. That’s why his carom doesn’t even reach the second track. Currently the monetary base amounts to 4.039 trillion dollars and the Leliqs and exceeds more than double: 8.6 trillion (Central Bank Daily Monetary Ratio) and accrues an interest rate of 100% per annum equivalent to to 8 million minimum pensions. She takes out the handkerchiefs.
Source: Clarin
