Despite in the second part of this month, thanks to a slight increase in the supply of foreign currency due to the “dollar soy 3” program and a higher stock of imports, the Central Bank managed to rebuild its purchasing position in the official market and has accumulated 196 million US dollars in May, its level of gross reserves continues to decline.
This Tuesday, despite agricultural exporters liquidating $66 million and the BCRA managing to keep $14 million, gross reserves decreased by another 155 million US dollars, passing the minimum threshold of 33,000 million US dollars and a total of $32.907 million at the end of the day. The trickle is constant and accelerated: since last April 24, 3,361 million dollars have already left the Central’s coffers.
Why if the Central Bank buys dollars again, reserves keep declining? The reasons that explain the haemorrhage range from payments to international organizations, to the withdrawal of deposits in banks, and, what the market looks to the most: interventions in the financial sector.
“Reserves continue to decline, which is explained by a dollar drain that has moved from the commercial to the financial channel,” they pointed out to the consultancy firm LCG, where they also added. “The few dollars acquired with the Agro Dollar are consumed in purchases of government bonds, in order to maintain intervention in the dollar financial market.”
Since last Thursday, the Central Bank has surprised the market by choosing to stay out of intervention on the bond market, an operation for which the City estimates it has lost almost 700 million dollars in one day. The following day, and after financial dollar prices skyrocketed, he reappeared, but with much more limited intervention than in previous rounds.
Now, to complete this task, the National Securities Commission has imposed a new barrier to the purchase of financial dollars, to “stop the curls” that could be done with certain market prices. The goal appears to be “managing the scarcity” and slowing the trickle of reserves somewhat, until at least IMF dollars show up.
“The Government continues to adjust exchange regulation to try to reduce the reserve drain as much as possible without further adjusting the level of activity through external credit. The outcome of the negotiations with the IMF is awaited along the same lines, where the government tries to use part of the disbursements for exchange interventions and thus better reach the PASO”, they indicated in Delphos.
“However, the IMF is likely to demand further corrections in exchange for this possible easing. Added to this are the political restrictions of an election year, which will force the government into a sinuous balance in the coming months. At the heart of it all lies the Central Bank with its interventions in multiple markets,” they warned.
With only four wheels left for the end of the third round of the Dollar Soy III program and no news from the Fund as yet, the market is concerned about how reserve momentum will continue starting in June. “Previous experiences show that, in the months following the end of the export increase programs, the balances in the official market are again in deficit, which portends greater difficulties for the BCRA in June and July,” said the consulting company.
In the market they value it net reservesi.e. the “own dollars” of the Central, if one discounts the dollar deposit reserves of savers, the exchange of currencies with China, the loans of international banks and other short-term obligations, already it would be negative by US$ 1,500 million. The dynamics of reserves puts a limit on the possible pax cambiaria. “The reality is that without net reserves, a surplus of pesos and fewer dollars due to the drought, it’s not insane to expect an even higher price,” they said in the LCG.
Source: Clarin
