Monday, February 26

CCL dollar fell for the fourth round and pierced $220: gap fell almost 13 points since agreement with IMF

For its part, The MEP or Stock Exchange dollar fell 1.7% (-$3.75) this Wednesday and ended below the blue, at $210.88. Compared to Friday, the price collapsed $12.87 and the gap shrank from 113.6% to 100.5%.

“Having reached an agreement is positive for the markets, although there are still details of how it will be reduced to zero in a few years, both the fiscal deficit and the transfers from the Central Bank (BCRA) to the Treasury, and be able to finance itself with the private sector”, noted Research for Traders in a report.

Despite the approach between the Government and the IMF to finish closing a deal for the renegotiation of the debt, investors remain attentive to the internal ones within the ruling party and how much impact this can have in the conversations with the multilateral credit organization.

“There is concern from the IMF about the social and political support for the agreement, beyond the numbers; obviously there is a concern about the legislative process.“, Argentina’s representative to the organization, Sergio Chodos, said in radio statements after Máximo Kirchner’s decision to resign as head of the block of deputies of the Frente de Todos in dissent with the agreement.

The principle of agreement with the Fund, which must be approved by the local Congress and by the board of directors of the Washington-based institution, involves a “gradual” reduction of the fiscal deficit so that it reaches 2.5% of GDP in 2022, to 1.9% in 2023 and 0.9% in 2024, and forecasts that the BCRA’s international reserves will grow by US$5 billion this year.

The Government’s idea, at least according to the public statements of its officials, is to lower the deficit through greater economic activity that supports collection, added to greater control of evasion. However, many analysts warn that this will not be enough to reach a “red” of 2.5%, but that some cut will be needed on the spending side.

This Tuesday the Ministry of Economy reported that the collection for January was $1,171,943 million, which implied a slight year-on-year increase of 1% in real terms.

The increase was driven by higher income from taxes linked to employment, such as Personal Contributions, Employer Contributions and Earnings. On the contrary, a strong decrease was observed compared to January 2020 in Export Rights, which was mainly explained by the difference in the price of commodities.

official dollar

In the wholesale segment, the exchange rate advanced eight cents to $105.20, under BCRA regulation. So far this week, the official registered an adjustment similar to that of the previous week, which reflects that there is no acceleration in the rate of devaluation.

Joaquín Marque, Director of UG Valores, foresees that the acceleration in the displacement of the official dollar will occur along with an agreement with the IMF, anticipating the liquidation of the soybean and corn harvest in April to accumulate reserves more quickly. “A devaluation without an agreement could cause a strong rise in inflation,” he clarified.

After reaching $105.24 during the day, towards the end the higher inflow of dollars forced small falls in the price of the dollar that touched the lows of the day, a level that was maintained until the end of operations.

In that framework, the monetary authority ended its intervention in the foreign exchange market with a neutral balance, after selling almost US$50 million on Tuesday and some US$130 million accumulated in January, to supply a demand for “greenbacks” driven by company debt payments and a high level of imports to sustain the economic activity.

The Chamber of the Oil Industry (CIARA) and the Cereal Exporters Center (CEC), entities that represent 48% of Argentine exports, reported this Wednesday that during January the companies in the sector liquidated US$2,441.6 million , being the second best January of the records of the last 20 years, only surpassed in 2016.

“February will be a month of high volatility in macroeconomic variables. In addition to the political uncertainty that reigns around the approval of the agreement with the IMF, it is added that this month usually presents low demand for money and little liquidation of exports,” he warned. I dialed.

It is worth noting that, after payments to the IMF this week, net reserves will be below US$2 billion. According to official sources assured Ámbito, this Friday the payment of almost US$370 million will be finalized.

“The continuity of the pressure on net reserves continues to accentuate concerns, pending reimbursements by the IMF in search of strengthening said position and thus perhaps being able to accelerate the pace of the crawling-peg more decisively,” said economist Gustavo Ber.

For its part, the savings dollar or solidarity dollar -retail plus taxes- grew 28 cents to $183.02, as the retailer – without taxes – rose 17 cents to $110.92.

The blue dollar recorded its third consecutive rise this Wednesday, February 2, 2022, climbing $2.50 to reach $216.50, according to a survey of Ámbito in the Black Market of Currencies.

In this way, the parallel dollar, which had risen $1.50 between Monday and Tuesday, recovered ($4) almost half of the fall of $10 suffered last Friday as a reaction to the announcement of the country’s agreement with the International Monetary Fund ( IMF).

All in all, the gap with the wholesale exchange rate, which is regulated by the Central Bank, widened to 105.8%.