In the first three weeks of December, the Palacio de Hacienda asked the entity chaired by Miguel Pesce for $ 345,000 million in temporary advances to pay for the needs of the treasury, even despite the fact that in the first tender of the month the Ministry of Finance ended with a net debt of $ 105,000 million.
December is, due to seasonal factors, the month with the highest Treasury deficit: in the last five years the monthly primary red averaged 0.9 points of GDP, according to a report by Equilibra. By 2021, the consultancy estimates that it will be 1%, that is, $ 452,000 million, half of the accumulated in the previous eleven months. If it materializes, the need for any additional transfer from the BCRA would depend on the result of today’s bidding, which will be demanding since more than $ 280,000 million of debt in pesos mature.
To the money issued to fund the treasury, there are more than $ 100,000 million from the payment of interest to the banks for the Leliq and the Passes. However, just as the needs of the treasury are greater in December, the demand for money also increases: the payment of the Christmas bonus, vacations, taxes that expire at the end of the year and the purchases of the holidays make the public need more pesos. This brings a seasonal respite to the demand for dollars and even some supply, as observed in the cash settlement as a result of the millionaires who enter part of their currencies into the country before the expiration of Personal Assets to pay a lower aliquot.
But despite the short summer exchange rate in December, the BCRA does not want to lower its guard. In January and February, the dynamics reverses and the demand for money recedes. In other words, the pressure on the dollar returns to normal. Sources from the economic team explained to Ámbito that the intention is to avoid that the bulk of the pesos issued “remain on the street” so as not to encourage extra exchange complications during the first two months. “The idea is to keep control of the weights,” they pointed out.
For this reason, the Central turned on the peso vacuum cleaner, which had been off in November. It placed the banks $ 262,948 million between December 1 and 27, and withdrew from circulation the bulk of the money issued to finance the Treasury. Thus, the stock of remunerated liabilities of the entity (Passes plus Leliq) climbed 5.9% compared to the end of last month, reaching a record of $ 4.7 trillion.
The strong absorption of liquidity via Pases and Leliq is the strategy that the BCRA maintained during most of the year, which it defined as “monetary prudence”. Although this policy triggered paid liabilities, it caused monetary aggregates to maintain a contraction of more than 10% in real terms compared to the 2020 shock. The premise was that a greater injection of pesos into the economy would further heat up the pressure on the dollar. .
The December one is a partly preventive sterilization. The reversal of the demand for money will take place in a challenging context in exchange matters, with pressure on international reserves, more debt maturities and negotiations with the IMF as a backdrop. After the last payment to the agency for US $ 1,855 million, international reserves pierced the level at the end of 2020 and yesterday closed at US $ 39,182 million. Private estimates place net holdings (discounting the BCRA’s foreign currency liabilities) at around US $ 2.2 billion.
The economic team is closely monitoring this picture, although they hope to be able to weather the first two months without exchange rate surprises. With an acceleration in the rate of depreciation that has already begun, the official priority is to avoid a devaluation jump. The favorable element is the record liquidation of the wheat crop, already observed this month.
Meanwhile, all this cocktail of variables is part of the negotiation with the IMF, which is pressing for less issuance, greater accumulation of reserves and, therefore, a more accelerated fiscal adjustment and more limited growth for next year.