Dollar. The debt agreement did not calm demand and the BCRA continues to lose reserves

The announcement of an agreement with the bondholders, a step that not only directed the exchange of the debt in dollars under foreign law, but also laid the foundations to move forward later with that issued in foreign currency and under local law -steps that will leave, once finalized, a very clear for a few years-, so far it has not been able to contribute the calm quota that was expected for the exchange market.

Proof of this are the persistent sales that the Central Bank (BCRA) is forced to make to cover the decoupling between a declining supply and a sustained demand, Despite the strict restrictions that seek to limit it, which once again put its net reserve position in a situation of stress, which once again drilled US $ 10 billion in total and fell below the liquid US $ 6 billion (the rest is the position invested in gold that appreciated strongly in recent months).

The official data show that it sold US $ 477 million in the first week of exhaustion (US $ 95 million per wheel), 73% higher than the US $ 258 million released to the market in the same period of July.

And the preliminaries of this week advance that it maintains a persistent negative balance, increased by the US $ 40 million that it would have sold today, according to different market operators. in a context of supply that was reduced 16% in relation to the previous week.

What is striking and disturbing is that sales persist even when what the governing body of the system recognizes as the “critical period” of the month, Alluding to the high incidence that retail demand has had on total purchases since it took flight last May, since a large part of the allowed quota is usually used up by people as soon as they receive their income.

The uncertainty about the final destination of the pesos

Analysts coincide in relating the increase in the dollarizing thirst with the fears that the future generates sustained monetary issue to finance the treasury and the lack of visibility that the economy maintains in this regard.

But other referents also observe some inconsistencies in the management of the variables that usually influence when investors must decide the destination of their savings. They allude, for example, to a slippage in the exchange rate that is higher than the gain that can be obtained with a fixed term (although the rate it pays is slightly positive in relation to reported inflation) and the growing fear that the BCRA it cannot even sustain it from now on, as it has a very weakened liquid reserve position.

“The market discounts that the monetary issue will continue to be high in the remainder of the year, an assumption that was strengthened after the recent budget expansion. It must be taken into account that to the transfers to the Treasury must be added the $ 378,000 million that have been paid in interest from Leliqs. This is what explains the expectations of an inflationary acceleration towards the last months of the year and keeps the demand for dollars active“, explains the economist Amílcar Collante, from the Center for Southern Studies (Cesur)

“With this level of activity and with the magnitude of the favorable balances in the trade balance, that the BCRA continues to lose reserves is only explained by the level of uncertainty that exists regarding tomorrow. But the truth is that the bleeding, although slow, is significant “, explains Federico Moll, director of the Ecolatina consultancy.

“There is consensus on the direction that fiscal and monetary policy should have taken due to the pandemic: what worries the market is that there is no talk of the exit path. That explains the unusual level of gap that we have, with a level of the exchange rate that, although its level can be discussed somewhat, is very far from being the hyper-backward of 2015, “he agrees.

For the economist of the ACM consultancy, Juan Pablo Di Iorio, what produces the exchange imbalance is “a problem of portfolio imbalance”.

“The real exchange rate is not the cause of the problem, as at other times, since it remains competitive. I believe that the imbalance is generated by the combination of a strong monetary issue and the lack of presentation of a consistent monetary and fiscal scheme that specifies what will be done with the excess pesos when the pandemic eases, “he explains along the same lines as his colleagues.

“This generates devaluation and inflationary expectations that are fed back by the loss of reserves, since for people it is an early indicator of devaluation or greater exchange restrictions,” says Di Iorio.

But to that he adds a rate of devaluation of the peso that, although corrected somewhat in recent weeks by the BCRA, continues to mean a yield greater than the minimum rate that they recently imposed on fixed terms. “The current slippage, at a rate of 0.09% per day, annualized implies a rate of 36.3%, 3.3 points higher than what a fixed-term deposit pays today”, details.

Rumors reappear in the market from time to time stating that the Government will be forced to reinforce the stocks or lower the allowed retail purchase quota somewhat more.

But at the BCRA they insist that “no initiative in this regard” is being studied and they hope that the completion of the swaps will reduce pressures since September. If so, the strategy appears to be one of “endurance.”

Collante believes that the swap, when completed, “will mark a ceiling on alternative dollars.” And he adds: “If to that is added an announcement that provides a little more visibility, there will be the chance to redirect the exchange market. But until then, there will be noise, because it is feeling that agricultural sales are beginning to fall due to a seasonal issue “.

In this regard, it should be noted that the liquidations of grain and oilseed exporters, which had reached US $ 618 million in the last week of July, fell to US $ 433 million in the first of August (average of US $ 86.6 million) and they were around US $ 59 million in the first three wheels this week.

–