During the presidential campaign, Alberto Fernandez he had vowed to reduce the weight of the Leliq. The expansion of the snowball of the BCRA’s remunerated liabilities had been one of the trademarks of Cambiemos’ management, as part of a model that stimulated the inflow of short-term capital to carry out carry trade (the famous financial bicycle) . But the pandemic truncated official plans. The monetary issue shock that it had to carry out to finance the health measures and the assistance package (IFE, ATP) led the Central to increase the rate of sterilization of the injected pesos to avoid additional pressure on the dollar.
This strategy, which the Central called “monetary prudence”, gained particular strength this year. After a first half of 2021 of marked fiscal discipline, the greater seasonality of spending in the second semester and the impact of financial tensions on a lower rate of renewal of the Treasury debt caused the BCRA’s assistance to the treasury to accelerate between July and October. Thus, the monetary authority turned on the peso vacuum cleaner: in October, per case, the stock of remunerated liabilities increased 6%, reaching a record of $ 4.44 trillion. For all this, the accumulated payment of interest for the Passes and the Leliq will close the year at around $ 1.3 billion. On the other hand, it induced a contraction of the monetary base of more than 10% year-on-year in real terms.
In November, some factors allowed the BCRA to give the vacuum cleaner a break. After the months with the most demanding maturities, Finanzas managed to increase net funding in the debt market in pesos to $ 141,000 million, the second largest of the year and more than five times higher than the average of the last four months. This meant that the portfolio led by Martín Guzmán needed less assistance from the Central to cover the monthly deficit: with data up to November 29 (that of November 30 is not yet available), Pesce had sent $ 130,000 million to the Treasury as temporary advances , well below the $ 352,712 million that he had turned in in October.
Paradoxically, the sale of around US $ 890 million by the BCRA in the official exchange market also “collaborated” to sustain the rate of depreciation at times of unfavorable seasonality for the flow of foreign currency. This implied a drain on reserves and, at the same time, implied the absorption of about $ 90,000 million. Thus, the BCRA avoided sterilizing via Pases and Leliq, although it allowed the monetary base to rise by $ 126,853 million or 4.2% (around one point above the estimated monthly inflation, unlike the previous months in which it fell in terms of real).
During November, the BCRA absorbed $ 103,801 million via Leliq, which implied raising its stock 4.8% to $ 2.26 trillion. On the other hand, it disarmed $ 117,396 million of Passes, so its stock was reduced 5.1% to $ 2.16 trillion.
The combined monthly disarmament of 0.3% is a marginal number. But it allows a glimpse of the path that the Central plans forward to reduce the ball of remunerated liabilities if things go as expected: as the issuance is cut to cover fiscal needs, one of the main requirements of the IMF in the last tranche After the negotiation, the official intention is to stop renewing the interests paid and then to advance in a slow disarmament of the Leliq and the Passes. As he argued in his latest Monetary Policy Report, this would take place in a context in which the growth of activity “would lead to a greater demand for real monetary balances.”
In this sense and in strategic terms, Pesce told the UIA on Wednesday that the BCRA has “the idea of changing the way of doing monetary policy.” As Ámbito had already advanced, he said that the entity plans to go from the “use of its own instruments” (Pases and Leliq) to the use of market instruments to manage the liquidity of the economy, as most central banks in the world do. and “fulfill the role of lender of last resort”.