On the fateful day when the April inflation was revealed, the Central Bank had the consolation of having managed to close the wheel with a positive balance of $101 million. Most of that figure – US$95.8 million – was settled in the $3 soybean fashion.
Precisely, the BCRA highlighted that due to this operation, which expires from the IMF, they liquidated 2,476 million dollars, exactly half of the $5 billion projected at the launch of the operation.
The wholesale dollar was this Friday at $230 pesos, just under half the value of the dollar when counted in liquid, which closed at $464. The blue parked at $474.
The Central Bank does not communicate the real amount of net reserves, which last week were negative by just over 1,000 million dollars.
What is known is that the Chinese swap is used so that Argentinean importers pay for their purchases from Chinese suppliers with that money. Sergio Massa has warned that almost 4 billion dollars could be used between now and August.
In practice, it is like borrowing from China for the amount that is used. The financial cost is around an annual rate close to 9%.
In parallel with the evolution of reserves, this Friday the market began to wonder, after knowing the April CPI, what the BCRA will do with it the monetary policy rate, brought a few days ago to a nominal 91% per annum
. One question is whether the board led by Miguel Pesce will wait until Thursday to possibly change the rate or do it before May 18. On the market they point out that with inflation hovering ever above 100%, a new rise would become inevitable. The nominal annual rate (TNA) of 91% is equivalent to 140% effective year. Bringing the TNA to 95%, for example, the TEA would jump to almost 150%.
Of course, by raising the interest rate, the Central Bank is forced to pay more interest on the debt it has contracted with the financial system, in the form of Leliqs and repurchase agreements. Today it is paying nearly a trillion pesos in monthly interest on that debt, the stock of which is close to 14 trillion pesos.
The delay in raising the interest rate a month ago, when we knew March inflation, which was 7.7%, was the spark that ignited the exchange rate rush that brought the blue dollar to the brink of the 500 pesos.
This is why it cannot be excluded that before Thursday the Central Bank will say something about the monetary policy rate.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.