With a weight trap, the Batakis-Fish tandem tries to get away from the edge of the precipice

The surge in free dollars leaves no room for reductions: the blue ones at 291 dollars and the cases with settlement at 297 dollars gaps greater than 130% against the wholesale dollar.

Silvia Batakis who at the time of his inauguration promised to respect the agreement with the International Monetary Fund of Martín Guzmán, decided to coordinate with Miguel Pesce, the head of the central bank, a more effective trap for an excess of pesos that until this week was more than oppressive.

The great fear of Batakis-Fish is that the pesos escaped the financial system in the midst of the inflationary rush and the dollar “cash with settlement”(Wholesalers’ legal operation) and blue after Guzmán lost the ability to finance the Treasury.

Now the new bonds abandon the idea that it is the Treasury, alone and alone, to guarantee the fulfillment of the debt.

Through a sophisticated financial circuit it is the Central Bank that becomes the ultimate guarantor of the obligations of the Treasury, while Batakis, as he had announced, was raising the rate of interest to improve the appetite of pesos investors.

In the new pesos trap Banco Nación participates, among others, which buys bonds in the primary subscription and sells them to the Central in the secondary market.

This trap, which for officials implies pull the economy back from the brinkobviously, and as has been verified in recent weeks, it does not prevent the tsunami of the pesos from becoming the engine of inflation (this month the increase in the cost of living could reach 7%) and the rise of the dollar.

In a report onref. Where do the pesos go? by Marina dal Poggetto, the data shows the trap rejuvenated and the dollar close to $ 300 in the free market. Pesos remain in the system, but first take a turn due to inflation and the exchange rate gap 132% between the wholesale dollar and the CCL.

The table shows that between 8 June (before the bullfight) and 13 July the monetary base (weight in circulation plus bank reserves) only grew $ 400,000 million, In front of a Increase of $ 1.35 trillion liabilities (liquidity notes, repurchase agreements, etc.) of the Central Bank. They went from $ 5.8 billion to $ 7.15 billion.

That quasi-fiscal deficit has gone from representing From 7.5% of GDP to 9.3% with a jump of 1.8 points. A pressure cooker in full emergency, but requires urgent tax solutions.

The Centrale took another turn with the raise the overnight rate for banks to 6% per month to place their surpluses. Monetary adjustment is on the agenda and the clear intention is for the pesos to remain either in the banks or in the BCRA.

On the dollar side, it is very clear that the Central Bank is bottoming out and so on the intention to avoid a devaluation It implies the possibility of reaching reserves until the end of August, when the government hopes to end up with $ 2 trillion a month for energy imports.

The tourniquet to the dollar’s shares through the 10-point increase in perception due to the tax on Personal gain or wealth (went from 35% to 45%) put the tourist dollar at $ 236.62 in the already long list of multiple exchange rates proposed by the government and which aspires to reduce demand.

The city of Buenos Aires and the rest of the country experience it at the regional level (Jujuy, Misiones, Bariloche) are overflowing with Brazilians, Colombians, Uruguayans and exploiting the exchange rate gap has become the most profitable business in Argentina.

With inflation of 64% over the past year and the wholesale dollar at $ 128 (it increased 33% over the same period), any import that can be paid to the official and serves as a basis for pricing at “heavenly dollar” It will be more than profitable.

Of course, this road is riddled with thorns and traps against the dollar and pesos can be a marked path to deepening an economy with more inflation and recession.

Batakis remained silent and Cristina Kirchner also respected the ceasefire with Alberto Fernández by stopping to “launch” ministers. The CGT has asked for a demonstration for August 17, too long a period in full crisis to confirm it or to revoke it.

The government and its allies walk on tiptoe so as not to make noise desperate adaptation which is on the move from the mixture of inflation and monetary contraction.