On Thursday the Government, at least for 24 hours, stopped intervening on parallel quotations, triggering a leap of the MEP to 473 dollars and of the CCL to 495. The measure promoted by the Ministry of the Economy avoided continuing to use the reserves to curb exchange rate pressures, but it didn’t stop the Central Bank from ending a new day with a loss of reserves.
In the official despatches, they ensure that the objective was a punctual intervention to stop the “curl” observed in the last wheels, from the official intervention from the gearbox stroke. “All the market speculation, nothing to do with the IMF, was to disarm the cycle, there was volume due to a demanding market,” the official sources said. And they added that “it was another thing of the day”, although they acknowledged that the decision serves to “take care of the reserves”.
But in the market they believe the decision reflects the limits of the Central Bank to continue to intervene. According to private calculations, that ordnance has gone from a daily average of $50 million to $70 million over the past two weeks. “We already calculate the cumulative intervention in the area of $550 million (we have offset the ‘Others’ factor in the change in reserves the impact of gold and yuan price changes),” the consultancy said on Wednesday. 1816 .
From the Central Bank they attribute the decrease in reserves to “some payments” and the decline in the price of gold and the yuan. The government activated weeks ago a tranche of the swap with China of 19,000 million dollars, which represents almost 60% of the stock and consumes reserves. But analysts believe there are other factors behind the bleeding. This Thursday, for example, the Central Bank lost $166 million, despite buying $50 million on the foreign exchange market.
“The ammunition for the financial dollar intervention is limited because there are not enough net reserves in the BCRA and if it only intervenes in the sell-for-peso bond leg without doing the buy-back leg of those bond-for-dollars, it will lose bonds and adjust parities downwards, and then it is not possible to avoid the rise in financial dollars”, explained Federico Furiase, director of Anker Latin America.
On the other hand, the interventions generate short circuits with the IMF. The body had already rejected the repurchase of securities in dollars in February and the intervention on the parallel market in March. Sergio Massa accepted, but the currency rush in April forced him to back down. And now we need to close the negotiation for the advance of disbursements with the agency. The deadline is June 21-22, when $2.7 billion matures.
Source: Clarin
