The BCRA sold USD 170 million in the market and accumulates a drop of almost USD 300 million at the beginning of August

Bloomberg

In a session with a significant volume operated in the spot segment of USD 446.3 million -some USD 200 million more than on Monday-, the Central Bank had to carry out another strong sale for more than 170 million dollars. In other words, the entity had to contribute almost four out of every ten dollars traded in the wholesale round.

“In the first two days of august sales similar to the first two days of July accumulate, nearly 300 million”, Market sources told Infobae, adding that this Tuesday “the energy demand was in the USD 70 million”.

So far in 2022, it has accumulated net purchases in the wholesale market for just USD 316 million, an amount that represents the 4.5% of the net balance in favor obtained in the same period of last year, which accumulated some USD 7,091 million as of August 2, 2021.

International reserves fell USD 202 million on Monday and ended at 38,038 million dollars.

“Massa generates expectations, but there are no changes in energy matters or at the fiscal deficit level, at least for now. We believe that the biggest change will be in relation to the reserves of the Central Bank”, indicated the experts of Adcap Financial Group.

“We believe that Massa will be bold and aggressive in his offer to the field. In a rapprochement with the countryside, it could offer a special dollar to this sector to encourage liquidation and thus strengthen the BCRA’s reserves. In any case, we believe that it is early to say that things will change outside of the reserves”, they added from Adcap.

Source: GERES, based on BCRA.
Source: GERES, based on BCRA.

A report of wear (Group of Studies of the Economic and Social Reality) indicated that according to the latest balance of the Central Bank, updated to July 23, the total reserves reached USD 39,718 million, while the net reserves accounted for about USD 5,069 million. This last item includes USD 3,424 million corresponding to gold and USD 5,544 million equivalent in SDRs (Special Drawing Rights) from the IMF. Without these contributions, strictly liquid reserves are negative by 3.9 billion dollars.

Strong retail demand for forex in July

In July, the retail demand for foreign currency grew strongly, due to the exchange uncertainty that catapulted the price of the free dollar by 24%, together with greater liquidity due to the payment of the half bonus.

The AFIP reported that the income from the Tax for an Inclusive and Solidary Argentina (PAIS) “reached in July the $41,795.5 million which represents a year-on-year increase of 318.5%, the highest collection for this month since its implementation. Its collection accompanies the hoarding of foreign currency and tourism abroad.

If one dollar is taken from the average public of $134,285 in July -discounting the 30% surcharge for the PAIS Tax and 35% as an advance on profits-, the sale of foreign currency to individuals who paid the “solidarity” tax rose to about USD 1,037 million for this concept, according to an approximation based on AFIP data.

These currencies not only did not remain within the local financial system, but the private sector dollar cash deposits fell in July about $871 millionto USD 14,673 million as of Thursday 28 -latest data available-. These placements, for the most part are accounted for as BCRA gross reserves, are at their lowest level since November 2020.

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