For the first time in 37 days, the Central Bank found itself with a selling balance for its foreign exchange market operations. The organization had to spend $10 million to meet private sector demand in the free foreign exchange market. Regardless, the organization managed to end the month with net purchases of $3,273 million.
Despite breaking their longest buying spree in two decades, Central Bank reserves rose by more than $2.5 billion this Thursday after the pending payment by the Monetary Fund was completed, as confirmed from government sources. The organization transferred to the country the 4,700 dollars expected for this month and about 2,200 dollars were used to cancel commitments with the IMF itself.
International reserves have increased by $6,668 million since Javier Milei took office at the Casa Rosada on December 10. According to a calculation by Aurum Valores, net reserves, which at the time were estimated to be negative at -11 billion dollars, would have recovered almost 4.5 billion dollars in the last forty days.
In the latest revision of the agreement with the Fund, the annual objective of recovering net reserves of 10 billion dollars by December this year was set. In this way, in the first month of the year, the Central would have already reached 45% of this objective.
In the first month after the devaluation of December 13th, the Central Bank managed to consolidate itself as a buyer on the wholesale market because private demand remained almost frozen.
Thus, the organization chaired by Santiago Bausuli closed January with record net purchases for the first month of the year after years on the stock market. The balance of more than $3.3 billion was surpassed only by the first soybean dollar issue, in September 2022, when the organization was able to purchase $5 billion.
“This unprecedented series was possible thanks to the fact that exporters started to liquidate massively after the discreet record jump of the official dollar and the Central Bank bought practically all this supply in the face of a demand that remained very limited,” they said. observed in the PPI.
At the same time, they added: “This phenomenon, which allows for the forced accumulation of reserves, remained at a similar size in January, in accordance with the apparent private demand observed from the volumes operated on the MAE spot market and BCRA purchases” .
While import demand is likely to remain in the wholesale market, the City’s fear is that export liquidations will decline as real exchange rate appreciation discourages dollar sales in this market.
Consultancy firm LCG explained: “Looking ahead to 2024, without the effects of drought and with improved price competitiveness through fairness of the official exchange rate, a notable improvement in the goods trade surplus is expected.” However, they warned that the goal of accumulating $10,000 million in net reserves this year still appears difficult and it remains to be seen whether the recessionary effect and the increase in the exchange rate will be enough to moderate the demand for dollars for imports such to allow this accumulation.
In the parallel market, and with the eyes of investors and savers focused on the discussion of the Omnibus Law in Congress, financial dollars ended up collapsing. Nonetheless, increases of more than 18% in the case of the MEP dollar and 28% in the case of cash with settlement have accumulated during the month.
Source: Clarin
