When only one wheel remains until the end of 2023, the year will end a loss of Central Bank reserves of $21.8 billion. Over the course of the year, exchange rate lags, gaps and droughts limited supply and combined to produce an accelerated hemorrhage of foreign currency.
A part of that film changed after the devaluation ordered by Javier Milei and brought the official dollar from $365 to $800 overnight. Since, The Central Bank has accumulated purchases of 2.6 billion dollars.
This Thursday the monetary authority purchased 305 million dollars. Specifically, in the last eleven rounds the Central Bank has pocketed 2,592 million dollars. This has allowed us to narrow the red of the net reserves, those that can actually be used to intervene on the market, which are now close to -10,000 million dollars, after having reached -12,000 million dollars in the period preceding the elections.
There are several reasons behind this incipient recomposition of reserves. The devaluation fueled liquidation by exporters and at the same time the gap with financial dollars reduced from 100% to 15% current in case of cash with liquid.
“From an extremely negative low, net reserves are improving. It will take many months of currency purchases to rebuild the steep deterioration inherited. It should be noted that The accumulation of these days is achieved by maintaining restrictions on the payment of imports“, underline from Aurum Valores.
The sharp shortening of the gap limited the demand for financial dollars and freed the Central Bank from the need to supply that market to avoid an escalation of the MEP and CCL.
So they went to the monetary authority 3 billion dollars since the PASO elections in August.
From Portfolio Personal Inversions (PPI) they point out that exporters are massively turning to liquidation under the Export Increase Programme, which allows them to sell 80% to the wholesale dollar, today in $808and another 20% in cash with liquidity, today in $936. This comes “in the face of a sharp increase in the price of financial leverage (the crawling peg at 2% monthly and the peso rate at around 9%) and a real exchange rate that is rapidly appreciating with inflation traveling at 30% monthly.”
The PPI underlines that the total liquidation of exporters is approaching 4.5 billion dollars. Therefore, 20% of this amount, i.e nearly $900 million would be channeled through liquidity, explaining to a large extent the collapse of its price in the last ten wheels.
Liquid liquidity rebounded this Thursday, with an advance of 7.6% which brought it to 936 dollars, but it is still far from the levels $1,150 reached before the presidential elections in October. The MEP closed at $953, up 2%, and the blue remained at $953 $1,000.
“With a gap that has reached minimum levels of 10%, operators are attentive to this dynamic combined with the decline in peso rates and a creeping peg by only 2% because, if there are no changes, could lead to expansion in the future“, says economist Gustavo Ber.
A new widening of the gap “It could happen in a gradual and orderly manner from now on, although possibly with greater determination towards FebruaryThe reason is that in that month the greater demand for money that prevails in December and January is reversed. For this reason, “a convergence in the pace between rates and the dollar may be necessary, as the strong liquefaction process could “activate greater demand for exchange,” says Ber.
Source: Clarin
