The most important thing about the last financial day is that for the first time after 23 consecutive days of negative salesthe Central Bank (BCRA) bought dollars again in the single free exchange market (MULC).
The purchase was only 2 million dollars but it should be noted that in the last week before the Easter holiday, the BCRA sold at an average rate of 90 million dollars per day.
On the second day of validity of “agro” dollar, or third version of the soybean dollar, the other important and negative news for the Government is that exporters due to various administrative and financial obstacles they could not liquidate dollars to the BCRA and it is expected that the market will normalize only on Thursday.
On a day that was marked by the start of the new restrictions on cash operations with liquidation with bonds under foreign law and with the fact that the Central Bank bought currencies in the market for the first time after 23 rounds as a seller, the free dollar ended at 394 pesos and the country risk increased to 2444 basis points. For their part, the financial dollars alternatives ended with losses with a CCL that closed at 400 pesos and the MEP at 387 pesos. While the value of the official dollar reached 220 pesos.
a complex situation
What further aggravates the situation is that, according to the data contained in the second year of the Extended Facilities Program, Argentina will have to repay maturities for about 15,000 million dollars.
As data, it should be noted that despite the disbursements that the Central Bank received from the IMF, so far this year the gross international reserves they reach 37,200 million dollars compared to 44,500 million dollars at the end of last year. The BCRA has already consumed almost all the dollars it has received from international organizations so far this year.
In the first two days of validity of the agricultural dollar, there were no liquidations under the new scheme
In this regard, it should be noted that between the first payment of 2,700 million dollars made to the FMI As soon as the disbursement was approved on March 31, and with two payments that will be made until next Friday, the BCRA will have consumed all the SDRs authorized by the board of directors of the organization after approving the goals of the last quarter of last year.
He financial schedule It shows that on Monday some 1,300 million dollars were transferred, next Friday they must transfer another 650 million dollars, the following Friday another 650 million.
what’s coming
Then on April 28, 690 million dollars more must be paid and finally on May 1, 530 million dollars. This will be the last payment to be made up with the disbursement made by the IMF on March 31.
This year’s interest and principal payments to the IMF this year are much more demanding than last year’s and the renegotiation of goals with the IMF will be in the news again this week with the presence of Economy Minister Sergio Massa in Washington at the Spring meeting of the IMF and the World Bank, where the goal of net international reserves (NIR) will probably be modified again, which was not met in the first quarter of this year and will need to be amended.
That RIN goal that was 1,900 million dollars that was breached the first quarter, it is 6.8 billion dollars for the second, 7.2 billion dollars for the third and 8 billion dollars by the end of the year.
On the other hand, the next IMF disbursement It has a date for July 31, but before that, the revision of the first quarter goals will have to be approved. Perhaps the IMF will relax them again as it has done up to now.
After 23 consecutive days of negative sales, the Central Bank (BCRA) returned to buy dollars
Why doesn’t the agricultural dollar start?
Contrary to what was expected, on Tuesday no operations were registered of the “soybean” dollar nor of the “regional economies” dollar. It is curious that, given a mechanism that should already be in place since the “soybean” dollar 2.0 implemented in September, no settlements have been made.
Recent history shows that while the first release of the soybean dollar No operations were registered on the day immediately after the announcement by Minister Sergio Massa. On the second opportunity, on Monday 11/28, exporters liquidated 292 million dollars, of which the BCRA bought 192 million dollars.
apparently this new “agro” dollar It is the least attractive of the three launched, given the drought, the lack of liquidation of dollars, the increase in inflation and the prospect of improvement in effective price before a change of government, it will be necessary to see the degree of adherence of the agro-export sector in the next days.
As a result to null liquidation of agriculture In these two days of operations, the BCRA shows a negative balance of 97 million dollars since it sold 99 million on Monday and bought 2 million yesterday, but the trend is still not clear. The important thing is that since Tuesday, for the first time, a selling flow that came from last March 6 and the BCRA stopped.
What is expected for April
The problem is that March was one of the months of worse performance for the monetary authority, not only from the years with exchange controls but also from the end of convertibility.
April should be a point of inflation if historical sales and purchases of dollars are analyzed since it is the beginning of what some analysts call the green quarter that runs from April to June where the largest currency liquidation by the agro-export sector.
The new “agro” dollar is the least attractive of the three launched, given the drought, the lack of liquidation of dollars and inflation
Both the drought This delays the entry of the coarse harvest, which will be much less than last year, as the early liquidation of the soybean dollar last September at 200 pesos and December’s at 230 pesos could play against the government.
The most relevant fact is that the indentation of international reserves of the BCRA shows that in the last 55 rounds, the worst streak of the government of Alberto Ferandez amounts to about 3,800 million dollars. This is the result of the accumulated settlements of the “soybean” dollar that reached around 4,967 million as of 10/26/22 and of the “soybean” dollar 2.0 of around 1,839 million as of 01/30/23.
Rising uncertainty
The economic team is aware that this dynamic could be repeated in the third quarter and could be further complicated by the 20,000 million agricultural exports that will fall due to drought.
This exchange rate uncertainty In addition, the new restrictions imposed by the National Securities Commission (CNV) on CCL dollar operations with foreign legislation bonds that the market has not yet finished digesting are added.
A recent consultancy report Portfolio Personal Investment It stands out that it is a decrease from two to one day of the parking to sell against the dollar currency titles of local legislation such as Bonares, bonds/bills in pesos/ON local law), while the same parking for bonds increased from two to three days with foreign Law as Global/On ext. Law).
What pursues this change?
According to the report, the measure attempts to generate some demand for the Bonares by facilitating the purchase of CCL through these. In this regard, it should be noted that today it is much more liquid for operators to carry out this operation through Global bonds, so this differentiation of days could encourage some local players to rotate their position to Bonares at the margin.
The market has not yet finished digesting the new restrictions imposed by the CNV on CCL dollar operations with foreign law bonds
“In our opinion, this is an additional measure that could accompany the program of dollar debt in the hands of the public sector and as we mentioned at the time, we believe that the Treasury should generate “new” demand for Bonares in the private sector by easing some regulations,” the report says.
This means in some way allowing public sector bodies to liquidate their positions of Bonares that would total about 5,000 million dollars at market value.
This modification could be a sign that the Treasury did not completely rule out the Bonares sale program of those of the public sector and in particular of the CONSIDERED which according to the numbers calculated by some operators would have almost 90 percent of the total of those bonuses.
How does the measure influence
For now it is not clear how this measure could influence the so-called spread of legislation between the two types of bonds. But if this measure will drive a rotation of Global bonds to Bonares bonds to make CCL dollar operations, this could translate into a reduction of the spread legislation. In any case, if the market will take this change as a sign that the Tesoro will carry out the exchange of bonds of public sector organizations with the sale of Bonares of those public organizations to the Treasury, the sense of the maneuver would be the opposite.
Currently, the relative spread between GD30/AL30 stands at 14.2% since the market gave its thumb to the public sector debt program in dollars, therefore we will have to wait for the next few days. It must be remembered that the Government is still waiting for the UBA to issue a part of that exchange, which is the envelope exchange of Globals by the DUAL36 to the ANSES.
In any case, for the next few days an improvement in the operation of the “agro” dollar is expected when Resolution 1152.023 was published yesterday by which the Ministry of Agriculture in charge of Jaime Bahillo established the main measures that all those who adhere to this third stage of the Export Increase Program (PIE) must comply with. It will be extended until May 31, setting a value of 300 pesos for that differential exchange rate against an official dollar of 220 pesos.
The truth is that no matter how many measures the BCRA, the CNV and the AFIP take to increase the supply and reduce the demand that dollars It will be very difficult for the BCRA to get out of the critical situation shown by the liquid international reserves (RIN) in a country that increasingly lacks dollars to import inputs and produce consumer goods, where inflation spirals and the STEP of 13 August are a key determining factor before the presidential elections on October 22.
