Reserves of the Central Bank: the agency sold another US$150 million and does not stop its bleeding

The erratic exchange rate policy maintained by the Central Bank (BCRA), added to the announcements of upcoming readjustments that the Government would introduce to try to encourage the liquidation of stored grains and exports of some sectors in general, led that entity to lose another US$150 million of its net reserves today.

The figure reveals that the entity driving Miguel Pesce must have contributed 46% of the US$324.2 million operated in the cash segment to the market, two thirds of which were to meet purchase orders for the payment of imports for energy or fuel. That is due to deficit in which the country relapsed in the matter and the scarcity that this provision registered in the year due to the impact that the war in Ukraine had on prices.

Thus, the BCRA has sacrificed, in just four rounds of the month, a figure that exceeds US$580 million and is even somewhat higher than the US$571 million that it had squandered in the first four days of Julydespite the fact that in recent days it introduced new restrictions on retail demand via card purchases, for example, to try to rebalance the market.

If the loss so far in August is added to the already official “red” of US$1,284 million with which it closed July, it is concluded that in the last 35 days -despite the expanded stocks- some US$1.87 billion have already left them.

The data confirm the terminal situation faced by BCRA reserves that the management of the new minister Massa proposes to recompose, as announced yesterday in his presentation. The official began to discuss today the possibility of establishing a differential exchange rate to encourage pending soy settlements, but that definition would be pending a meeting with the Liaison Table, so it would not arrive before the weekend.

According to market data, the BCRA’s net reserves are already comfortably below US$1.5 billion, figure that would not even cover 10 days of imports. Even today a report from the Invest in the Stock Exchange (IEB) estimated it at just over US$1.2 billion. “On this front there is no margin to fail”warned its director, the economist Norberto Sosa, in relation to yesterday’s announcements about possible reinforcements. “It will be necessary to specify more details on these issues and that all this results in an increase in reserves. Otherwise, the pressures on the CCL and the exchange rate gap will continue, as well as the rumors about the need for an acceleration in the rate of devaluation”, they indicated.

If they remain in slightly positive territory backed by the SDRs drawn by the IMF and, especially, by a gold position valued at some US$3.5 billion that it maintains and would have re-pledged in part (as it did months ago) in order to have the necessary liquidity to continue intervening in the market. But there isn’t much thread left on that spool anymore.

Hence, the market considers that the definitions in this regard should be produced in the next few hours and speculates on the possibility that they will arrive before operations are reopened next Monday.

The new and strong loss of reserves (which helped the net holding also fall below US$ 38,000 million – it closed at US$ 37,332 million), was the central data of a day that showed the official dollar adjusting another 0.15% (the official wholesaler closed at $132.64), but, at the same time, it was surprising to register widespread declines in the prices of future dollar contracts, which ranged from 1.20% to 3.5% depending on the term.

This, according to the operators of these places, was not due to greater official interventions (the BCRA’s sold position is already close to the US$9 billion limit imposed by the agreement with the IMF), nor to a supposed confidence in the plan. de Massa to get foreign currency; but it was more linked to the possibility that the Government issues a Dual bond in the market of the debt swap in pesos that will become official tomorrow, as LA NACION advanced today.

“The downward readjustment is logical with that expectation, considering the implicit rates that were paid in recent days,” said one of them when asked about it.

The bonds that would participate in the exchange would be the Boncer that mature in September (T2X2) and the Ledes, Lecer, Lepase that mature in August, September and October and would be taken at technical value. Its holders would be offered dual bonds, adjustable by the variation of the official dollar or inflation indexation (CER) to mature in 10 months (between June and September 2023).

Reserves of the Central Bank: the agency sold another US$150 million

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