The Argentines withdrew some of them $1 billion from the banking system since the end of March due to dollar uncertainty. The departure has been reflected in the dollar accounts that individuals and companies maintain in financial institutions. This indicator has deteriorated in recent months amid declining reserves, high inflation and currency tensions.
Private sector dollar deposits declined 6.5%, from $16,381 million on March 20 to $15,302 million on May 2, according to the latest data from the Central Bank. In this way, withdrawals exceeded the level reached after the resignation of Martín Guzmán from the Ministry of Economy last July.
From the Ministry of Economy, however, they highlighted that “the liquidity of the financial system in general and in particular with regard to dollar deposits is extremely robust. ” According to official data, the banks have US$3,866 million in cash at its branches and required reserves at the Central Bank total US$11,887 million.
This represents a coverage of more than 100% of private sector deposits. “Therefore, the sum of reserve requirements and banks’ dollar cash availability exceeds the stock of private deposits more than covers and ensures the solvency of the system.” emphasized by Economy.
Close to Sergio Massa believe that the “prompt intervention” of the economic team to stabilize financial dollars and the sharp rise in rates have restored calm to the markets. Following the bond market intervention, blue closed at $469, CCL at $456 and MEP at $432 last week. They also claim that deposits have increased by $30 million since May 4th.
Despite the fact that the government calmed parallel prices after the currency run, analysts argue that the situation it is still fragile. The soybean dollar deal has amassed just $2 billion since its inception in April, less than 30% of the first release in its first 16 rounds and less than the second, according to Ecolatina.
Thus, the Central Bank continues with difficulty to stop the bleeding of dollars and net reserves are already in negative territory, according to several consultancies. A factor that impacts on private deposits.
“According to the latest available data, gross reserves reach $34.1 billion. If we mainly discount reserve requirements and swaps, net reserves they are negative by US$1.2 billion. Although they were already in the red in early 2022, they had never been below $1 billion,” noted a report by GMA Capital.
In this context, the Government resumed negotiations with the IMF to advance disbursements, an amount reaching US$10.8 billion in the remainder of 2023. It also seeks to postpone the use of dollars in foreign trade through a credit in reais for Brazilian exports and an extension of exchange to pay for imports in yuan.
“However, these financial life preservers don’t sound optimistic considering that BCRA is selling $100 million a day at the same time that debt to importers thickens,” LCG warned.
The gap between the official dollar and the parallels – today around 100% – continues to be a key variable in the dynamics of reserves, as it discourages the supply of foreign currency from the export sector and fuels expectations of devaluation.
All in all, analysts agree that dollar deposit withdrawals I’m not a risk right now. “The liquidity of the banks is gigantic and we don’t see any risk from that side. The withdrawal of dollars is the problem, if not the consequence of the general instability. And of course that’s in the mood of the population,” explained an Econviews report.
Source: Clarin
