Saturday, March 2

Reserves: BCRA sold US$110 million in two days and halved the buying balance for January

The balance of the official participation in the wholesale market so far this month continues to be positive at close to US$100 million, although due to debt payments (the largest was the payment of interest to bondholders for US$693 million) the Gross international holdings fell US$629 million since December 30 and closed yesterday at US$39,033 million. According to private estimates, the net ones are around US$3,000 million.

The two consecutive rounds of sales coincided with a slight decrease in the liquidation of agriculture and a persistent demand. They highlight in the Government that 2021 closed with a record import of supplies and that this dynamic is sustained at the beginning of this year. To this were added restructured debt maturities by some companies, mainly that of Genneia, which will pay US$96 million this Thursday for principal and interest on a negotiable obligation.

The debt of companies was one of the main sources of pressure on the BCRA’s currencies in recent times after, during the Cambiemos administration, the stock of private financial foreign debt increased by more than US$20 billion. For example, Martín Guzmán said days ago that between 2020 and 2021 they demanded more than US$8.3 billion of reserves to cancel capital and interest on financial liabilities. That is why the entity chaired by Miguel Pesce led companies (through a limit on access to foreign currency at the official exchange rate to pay large capital maturities) to start restructuring processes as of September 2020. At the end of last year, it extended the validity of that provision to continue this year with the refinancing.

With the negotiation with the IMF to postpone the payment of the US$45 billion contracted by Mauricio Macri as a framework, the economic team is preparing to go through two demanding months in seasonal terms. Although wheat guarantees an interesting flow of foreign exchange (in total, the Rosario Stock Exchange estimates that it will earn a record of US$4.5 billion), with the end of the fine harvest, officials foresee two months in which the demand foreign exchange tends to exceed supply until mid-March when the sale of the thick crop (soybean and corn) begins to enter. At that time, they hope to start recovering reserves.

In this scenario, the Central maintains its liquidity sterilization strategy to limit the exchange impact of the seasonal reversal of the demand for pesos that occurs in January and February after the rise in December. Despite the fact that he began a gradual disarmament of the Passes for seven days until their definitive elimination, he continued to aspire strongly via Leliq so far this month to withdraw part of the money issued to cover year-end expenses. Until now, the stock of Passes has been reduced by $1.39 billion but that of Leliq has increased by $1.46 billion.

Thus, one of the unknowns is what will happen with the next maturity of capital with the IMF corresponding to the multimillion-dollar loan signed in 2018. It falls on Friday of next week and is around US$720 million. The following Monday, some US$360 million in interest expires. Although these commitments are prior to the US$2.9 billion that expire in March and whose payment was ruled out because it is unaffordable, it is not clear what will happen now that the negotiation with the agency has become tense due to Washington’s request for a fiscal adjustment. accelerated. Official sources consulted avoided giving details in this regard.

All this happens in the framework of the acceleration of the rate of depreciation of the exchange rate official implemented by the BCRA to gradually bring it closer to inflation. After a 2021 marked by the exchange anchor strategy to try to contain the rise in prices, this year the objective is to sustain the real exchange rate. Yesterday it validated a rise of 7 cents to $104.24 and, so far in January, it advanced at a monthly rate of 2.3%, above the 1.8% of December and the 1.1% that averaged between May and November. All in all, for the time being, it remains below the current inflation dynamics to avoid adding additional pressure to it.

This acceleration of the slide of the dollar contributed to considerably reduce the expectations of a devaluation jump implicit in the rates of the futures market, which fell between 13 and 15 percentage points for January and February so far this year. The financial analyst Andrés Reschini highlighted it: “There was a notable market correction since the end of 2021 in the expectations of an exchange rate jump (in terms of TEA) for the Matba-Rofex dollar futures in the shortest positions, after the BCRA will start to accelerate more gradually”.

The government has always ruled out a devaluation jump (since it would spiral inflation, complicate the reactivation and exacerbate the social crisis), although a good part of the investors bet in recent months that it would happen anyway. Last year, given the non-concretion of that scenario, the Central earned $30,000 million as a result of its intervention in the dollar futures market. In 2022 he will also try to impose his strategy.