While the countryside waits for an improvement in the value of the dollar, the BCRA slows down the rate of devaluation

It seems like a contradiction and it is an almost imperceptible movement but, at the same time that the countryside is waiting for an improvement in the exchange rate to sell its grains and enter the dollars that the Central Bank urgently needs to strengthen its reserves, The monetary entity began last week to slow down the rate of devaluation that had been accelerating since the agreement with the Monetary Fund was signed.. Thus, the incentive looks less and less in the context of the expectation for the announcement that the current “soy dollar” scheme will be exceeded, which expires in 5 business days and for which only USD 400 million of the USD 20,000 million that the Government calculated that producers retain.

The rate of “crawling peg”, that is, the step of the daily micro devaluations, was one of the most difficult points of the negotiation with the IMF but, to the extent that inflation accelerated, the Central Bank also hastened the step to avoid a greater delay of the exchange rate. This strategy seems to have changed in recent days. Although from the BCRA they affirm that it is simply “the volatility” that the entity intends to print on the price, the truth is that not only the speed of depreciation stopped accompanying -although always below- inflation but it even moderated slightly. Thus, while last month’s inflation stood at 7.4% and is expected to be around 6% for August, the exchange rate adjustment level runs these days between 4.7% and 5.4% per month. This slowdown that some analysts warn is consistent with making the rise in interest rates more effective, which the Central Bank left at 69.5% per year with a rise of almost 10 points, although both variables are below inflation. And it is also online with the idea of ​​taking pressure off price increasesparticularly food, determined by the value of the official dollar.

“The promised dollars continue to be delayed since the dollar-soybean scheme barely attracted sales of USD 400 million and the flow of pre-financing of exports seems to have been reduced so far” (Delphos Investment)

In counterpart, delaying the value of the dollar conspires against the efforts of the Minister of Economy, Sergio Massa, focused on achieving a more fluid income of dollars to rebuild the coffers of the Central Bank. This central concern for the Government became pressing in July, when the fleeting head of the Palacio de Hacienda, Silvina Batakisimplemented together with the president of the monetary authority, Miguel Pescethe “soybean dollar” scheme which, in light of the results, turned out to be a failure.

Since Massa took office, meanwhile, there have been talks with the authorities of the Liaison Table and also the different agricultural entities, such as yesterday’s meeting with the minister in Coninagro, but there are still no concrete advances. On the menu being discussed is the possibility for exporters to enter up to 40% of their sales at the value of the stock dollar, which would improve the exchange rate of all their operations by 30% but, at least for now, In the official dispatches, it is noted that the worst moment of the relationship between the demand for dollars and the level of liquidation was overcome, so they do not rule out that there may not be a new improved system that expires next week.

However, as highlighted in the daily report by the consulting firm Delphos Investments to its clients, “the promised dollars continue to be delayed since the dollar-soybean scheme barely attracted sales of USD 400 million and the flow of export pre-financing seems to have been reduced. until now”. Given the imminent expiration of the mechanism, news about greater incentives for producers is to be expected, according to the consultant, which warns that “Under this dynamic, it is very difficult for the government to meet the September goal of net reserves.”

It is in this context that the Government decided tightening the clamp on imports. Until now, the restrictions in force had mainly an impact on the purchase of goods destined for production. The new wave of controls will focus, instead, also on the import of consumer goods. However, the current regulations end on September 30 when, perhaps in light of the negative effects on the level of activity, modifications will be made.


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