The Rreserves of the central bank of Argentina (BCRA) they register their lowest level in almost seven years, according to official data, while the Government maintains its daily intervention in the exchange market in the face of growing inflation.
A historic drought hinders key grain exports and the devaluation of the weakened peso forces the loss of dollars to cover imports and energy payments, a scenario that puts pressure on net reserves to a negative accounting position, according to analysts.
Based on preliminary data from the BCRA, gross reserves pierce the line of 35,000 million dollars, a level similar to October 2016, when the Government fights inflation above 100% per year. On top of that, at this time there is a disbursement of about 700 million dollars to the IMF.
“At the same time, negotiations with the IMF continue to recalibrate the (current) agreement and eventually achieve advancement in the disbursement schedule for the second semester while continuing to finance imports from China through the”swap“among central banks,” said Delphos Investment.
Argentina seeks a new flexibility of goals and faster disbursements of the agreement with the IMF for 44,000 million dollars, for which it is pressing for the support of key members of the organization such as the United States and Brazil, government officials said.
“The rise of the dollar (the fall of the peso) generates a lot of uncertainty (…) It’s been more than a year since we had negative net reserves,” said economist Milagro Gismondi.
Along with speculative rearrangements of portfolios, the Government restricted operations starting this week of bonds in local currency with settlement in dollars to decompress exchange rate pressures.
The wholesale peso was devalued by 0.22%, to 225.65/225.70 per dollar with the intervention of the BCRA, an entity that in the last two days had to sell some 258 million dollars due to genuine market demand.
A special exchange rate for agricultural producersat 300 pesos per unit, fails to meet settlement expectations due to price differences between supply and demand, operators said.
The weight in the alternative lines dropped to 438.9 units in the “CCL” stock market and to 431.6 in the so-called “MEP dollar”. In the marginal or “blue” market, it gained slight positions at 467 per dollar, with a gap of 106.9% with the official parity.
According to private estimates among analysts, the retail price index April could be around 8%, after 7.7% in March, which conditions risky investments in a year in which Argentines will elect a new president.
Part of this adversity and profit-taking on the dance floor led the leading S&P Merval index in Buenos Aires to fall 0.99% to 285,983.2 points, after falling almost 3.4% in the two previous rounds.
The Federal Reserve raised rates by a quarter of a percentage point on Wednesday, signaling it may pause to give time to assess the consequences of recent bank failures, wait for the resolution of a political standoff over the US debt limit and monitor the course of inflation.
For its part, over-the-counter sovereign debt improved an average 1% due to the boost in dollarized issues after local noon (1600 GMT), in a context of prudent business and an eye on the exchange rate.
