Foreign trade transactions that Argentine companies pay in yuan occupy an important place in the Import System of the Argentine Republic (SIRA), the official “traffic light” that turns on the green or red light to advance or not in the process that culminates in the purchase of the currencies necessary to pay for these operations.
In May, according to a report from a private company that processes one in four SIRAs in the system11.64% of processed and approved applications required payment in yuan.
This means that licensed companies they will log in at some point with their pesos Mercado Único y Libre de Cambios (MULC) and in exchange they will sell him yuan, with which they will cancel debts with their Chinese suppliers.
In any case, the processed data reveal that the overall level of approvals it is very restrictive.
For example, this happened in May.
Only 35% of companies that submitted SIRAs achieved the total number of approvals. 31.8% of the companies have not obtained any type of approval. 5.6% of companies obtained just 20% of the required authorisations. 25.2% of companies obtained between 20 and 80% of what was requested. 2.4% achieved between 80 and 99%.
But one thing is the approval of the SIRA and another to be able to buy currencies. “The terms of payment depend on other factors such as the size of the company. The bigger the company, the longer they will have to wait,” they say in the foreign trade market.
By lines of business, the approvals were distributed as follows.
Wholesale and retail trade 38.4%; manufacturing 20.3%; Automotive 16.2%; Chemicals 6.4%; Pharmacy 5.1%; Paper 3.1%; Transportation 3.1%; Machinery 2.7%; Footwear 2.3% and Textiles 2.2%.
Something remarkable is happening in the orders for the import of capital goods: the terms of payment, ie for the sale of foreign currency, are extended to 365 days, with which the problem passes to the next government.
The sale of yuan to directly pay for foreign trade operations with that currency they started with a dropper and are now expected to grow in proportion to dollar trades. The yuan window naturally has a shorter queue than those companies that ask for dollars.
Now that sort of “Yuan Rain” we will see how the homologations are regulated, because if something was clear it is that there are no dollars And it is a mystery whether the Central Bank will be able to convert the yuan into dollars, not to intervene in the parallel foreign exchange market, akin to supplying foreign currency to importers.
Using that part of the swap is charged by the Central Bank of China as a debt to be collected. And it applies a Shibor interest rate (today at 2.6% per annum) plus a spread that would be around 6.5 points.
Companies with all the credentials deliver the currency purchase permit to their trusted bank and the latter ends up negotiating the purchase of yuan with the BCRA.
Companies based in Tierra del Fuego that import parts for products that are assembled in that province, some laboratories and also companies in the automotive sector pass through the yuan window. Of the total Argentine imports, 21% comes from China. Last year the trade balance was negative by almost 7,000 million dollars.
China grants these concessions – to Argentina and other countries – because the use of the yuan in international trade is one of the strategic policies promoted by the Chinese government to compete with the markets against the dollar and the United States.
The same agreement that Argentina signed with China, the government of Alberto Fernández wanted to establish with Brazil, so that imports from that country are paid for in reais. But the Central Bank of Brazil has categorically rejected this possibility. The monetary agency led with an iron fist by the orthodox economist Roberto Campos Neto allegedly said that Argentina did not offer any type of acceptable guarantee, in exchange for the reals that Brazil would have financed through the BNDES. Campos Neto is also a staunch opponent of the idea of creating a common currency for Mercosur.
What is clear is that companies importing from China would have easier access to central bank reserves (in this case yuan), which is already far from being replicated among importers who need US dollars to settle their operations.
The extreme drought will only widen the gap between those importing from China and those importing from other sources. The lack of reserves is what is driving the agricultural dollar which would be known this Wednesday.
Source: Clarin
