In another round of market tensions, with financial dollars surging and bonds and stocks declining, the central bank continued its sell-off and lost $139 million in one day. With the currency exit, already configure the worst start of the year since there are records: He has $871 million left so far in March and more than $1,820 million for the year.
From the monetary authority they informed that part of the day’s sales were due to currencies that the provinces of Santa Fe and Jujuy acquired to meet the payment of their debts.
Beyond this specific reason for this Friday’s sales, the outflow of foreign currency from the coffers of the Central takes place in a context dominated by drought, which conditions the liquidation of dollars by the campaigns.
Total sales through the single and free market (MULC) for 2023 amount to $1,820 million. “If you compare that to the same period in the years 2021 and 2022, then the monetary authority had a positive balance of US$2,043 million and US$236 million, respectively“, indicate from the IEB financial group.
The only good news that the Central Bank and the Government have received so far in March has been the confirmation that the IMF has agreed to make the reserve targets set for March 31 of this year more flexible.
The original goal was to add $7.7 billion in net reserves — what Central can actually use to intervene in the market — by that date, and it is now estimated that this goal will be eased by about $3 billion. Until now what was known is that the objectives will be adapted, but the new number has not been communicated.
At the same time, the IMF has confirmed that it will grant the disbursement of $5.3 billion which was foreseen and which will mainly be used to pay this month’s due dates with the institution itself.
From the consultancy firm Ecolatina they suggest that of those 5,300 million dollars that the IMF will deliver, “approximately US$1,700 million may be added to net international reserves (NIR) to get closer to achieving the goal for the first quarter.
“Although the recalibration of the reserve accumulation target has made it much more affordable, it is still a major challenge for the BCRA to meet it. At the current paceit is hard to imagine the BCRA managing to reverse the selling dynamics in the MULC in the last days of March“, IEB says.
From LCG advice indicate that the gross reserves of the Central Bank have been reached 37,700 million dollars, 500 million less than 7 days ago. “The decline responds entirely to the BCRA’s sale of foreign exchange, which It was a clear seller in All Wheels of the Week, averaging 100 million a day. Net reserves therefore stand at $1,250 million, down $400 million from the previous week.”
If you add the $1,820 million in Central Bank sales so far this year to debt payments to the IMF and interest to private bondholders, the decline in net reserves reaches $6,000 million compared to December 2022. reserve accumulation target, we would be US$6,300 million loweralthough this is affected by the severe drought affecting the field and its exports, so there could be eventual adjustments to this year’s target,” warns LCG.
Ecolatina points out that “the IMF recognizes -partially- the strong impact of drought and frost, which will be suffered mainly in the first quarter, also contemplating the savings that lower energy prices will bring in relation to 2022. According to reports, it would endorse cutting the target for the end of March (-US$3,000 million), but less for December – (US$2,000 million).”
This implies that “the government must continue its efforts currently to achieve the first quarter objective, but also You will need to double your efforts from April to continue accumulating beyond that level.”.
In this sense, the accumulation requirement between April and December would now be more demanding than before: “previously in that period 4.3 billion dollars had to be added, while now it would be 5.3 billion dollars. We are waiting to see how they will be fixed the objectives after the approval of the Board”, say Ecolatina.
The details of the new agreement with the definition of the objectives are expected in the coming weeks, when the board of the organization will make it official.
AQ
Source: Clarin
