Despite the smaller exchange rate gap and the decrease in country risk, the Government did not modify the official discourse regarding the definition of the exit from the stocks. However, Fundación Mediterránea decided to risk a probable date.: next summer.
“Exchange summer: does it lead to the exit of the stocks?” is the title of the report prepared by economist Jorge Vasconcelos, where he points out that paradoxically “The calm that reigns in the market has reinforced the perception of the continuity of the stockswith a ROFEX in which the contracts for March 2025 of the official exchange rate are agreed at 1,168 pesos.”
And he adds that “if the government were willing to contradict its own speech, I couldn’t anticipate it either. Given next year’s legislative elections, the opportunity to surprise and remove restrictions from the exchange market has only one window, and it corresponds to this summer season. In principle, it should be a move executed under the umbrella of the IMF, but there are not many signs in that direction,” says the economist.
Vasconcelos points out that the Central Bank in the last ten rounds accumulated a buying balance in the official exchange segment of US$ 811 million (daily average of 81 million). And he highlights that this is a consequence of the fact that laundering is operating as a kind of capital inflow, “to the extent that the increase in deposits in dollars begins to be recycled through new credits in that currency, or by subscription of Negotiable Obligations issued by local companies”.
Deposits in dollars, which increased in US$ 11.9 00 million since mid-August, favor the evolution of the gross reserves of the Central Bank, due to the calculation of reserve requirements, but the positive impact on the markets derives from an additional “turn of the screw”, which has to do with the application of “argendollars” to private credits or bonds. “This is what has happened in recent weeks, although it is still early to evaluate the duration and depth of the phenomenon.”
Therefore, he emphasizes that when the positive effects of money laundering and its collateral effects begin to subside, The problem of external flows will arise again. And to sustain the rebound in the level of activity, an increase in imports close to US$ 10,000 million in 2025 will be required and at the same time the net reserves of the Central Bank should begin to recover, from the current “underground” (negative in US$6.4 billionincluding BOPREAL maturities).
Vasconcelos states that since the previous release from the stocks during Mauricio Macri’s administration was a “bad experience”, now Getting out of the trap must be seen as something irreversible; Otherwise there would be too much “noise” on the side of expectations.
In the comparison with 2015 there is an element that works for it and another against it. The first is the low level of public spending measured in dollars, which today averages US$104,000 million annually, against US$214,000 under Macri’s administration. “This variable was unsustainable in 2015, while at present it is clearly a stabilizing factor,” he maintains.
On the other hand, when data on public debt in the hands of private creditors is compared, the conditions of 2024 are much less favorable, compared to 2015. At present, State liabilities in the hands of private creditors reach 40.0% of GDP, with domestic debt around 15.0% of GDP, while In 2015, these figures were 20.0% and 7.0%, respectively.
According to Vasconcelos, ““The debt factor could be more decisive than the dollar factor in fueling the government’s reservations when thinking about lifting the stocks.”.
Without the stocks or the participation of the financial system in the tenders, it would have been impossible for the previous administration to issue domestic public debt for the equivalent of 10.2% of GDP in 2023.
“Financial engineering will make it possible to meet a part of the external commitments of 2025, fueled largely by the dynamics of recent weeksbut there is still a long way to go before the scenario in which “naturally” debt maturities are refinanced“says the Mediterranean Foundation.
