The Central Bank (BCRA) postponed its board meeting once more today, the one in which he was expected to order a new rate hike following the dismal inflation data that was confirmed in February, and accelerated the rate of devaluation applied to the peso, by allowing an advance of 0.18% (19 cents) of the wholesale or commercial dollar on the day.
The largest adjustment validated was linked to the intention of limiting the loss of reserves due to market interventionswhen verifying that it would close the wheel with a negative balance for the second consecutive day following 11 days in which it had managed to repurchase reserves.
The entity allowed a settlement of $109.50/109.70 per unit for the wholesale dollar (purchase and sale, respectively), in a day in which spot operations were registered for US$238.6 million and in which it had to contribute some US$15 million to the market in order to process the purchase orders that had passed all the official filters.
In this way, it closed the week endorsing an increase of $0.82 in the official exchange rate, which is the “highest nominal correction since the week ending January 22, 2021″, analyst and trader Gustavo Quintana noted.
“The adjustment was 0.39% in the week and monthly it is projected at 3.2% in the month,” said analyst Andrés Reschini, from F2 Financial Solutions.
In turn, it accumulates a loss of reserves of regarding US$48 million between yesterday and today, although the weekly balance was positive by regarding US$43 million and the accumulated balance for the month remains with a net balance of around US$500 million. However, it is not enough for liquid reserves that remain negative at just over US$2,000 million.
Hence the anxiety that exists in the BCRA to capture the reinforcement for its reserves provided for in the agreement with the IMF. If he board of the organism approves on Monday what has already obtained parliamentary endorsement here, it will pocket some US$6.7 billion net, considering the debit to meet the payment of maturities with the organism next week.
Comings and goings, broth for the versions
The data adds to the confusion and the rumors that won the market following learning that the weekly meeting of the Central Board of Directors had been postponed once more, in which some definition of the level of rates was expected, which are once once more lagging behind compared to inflation that continues to rise.
It was speculated, for example, with resistance from the directors linked to the so-called “Christianity” -in line with the dissent to the agreement that they left expressed in Congress- that, added to the absence of other members of the body for travel and health reasons, it did not ensure the necessary votes to validate a new rate hike. If so, the internal of the ruling coalition also reached the board of directors of the BCRA.
Another version relates the delay to a revaluation of reserve requirements for deposits in progress.
For now, none of the rumors might be confirmed.
In this regard, it must be remembered that the memorandum signed with the IMF details that the entity must seek “maintain a positive real effective interest rate also consistent with a sustainable path for BCRA securities”, a commitment confirmed by local authorities. And it also plans a review of prudential reserve requirements.
“Retail depositors today receive a monthly rate of 3.45%, which is clearly lower than the 4.7% increase in prices in February and the more than 5-point increase expected for March. But matching these inflation rates would imply taking the fixed-term deposit rate to a nominal annual rate of 60% and we do not think that in the short term the BCRA will decide to reach those levels. It will surely focus on a longer period of time ahead and work with lower inflation assumptions. Therefore, the increase in interest rates might be similar to the last adjustments it made,” the fund manager Quinquela ventured in a report.
From the Central, consulted regarding it, They did not give further explanations regarding the new postponement.
They just limited themselves to remembering that the entity’s Charter only obliges its president, Miguel Pesce, to convene the board of directors at least once a fortnight, to point out that – from the legal point of view at least – they are not at fault.