To the rhythm of the voltage of the financial crisis, yesterday the Central Bank had one of its most tense days, in which it announced a series of measures, denied others and generated only one piece of news that went down well in the productive sector. A much better day is not expected in the market today, due to the negative impact that the new regulations would have on the financial dollar and the rumor, strongly denied, of a differential exchange rate for agro-exporters, which would negatively affect the flow of foreign currency income.
On alert for the “rain of letters” from industrial companies informing their clients of the difficulty in meeting promised deliveries or announcing production drops and even changes in payment conditions given the resolution that forces them to finance themselves in 180 days to import supplies, the BCRA decided on a key easing of the restrictions, which in any case remain in place and might have a strong impact on the level of activity and employment in the next two monthseven if the current exchange run is stopped.
The relaxation of the norm reveals the draconian nature of the lock on importers, since the Central reported that “the payment of supplies in transit” is enabled. In other words, the Government will give importers permission to comply with their obligations, agreed prior to the measures adopted by the BCRA to remove pressure on the demand for dollars in the official market.
There is suspicion in part of the Government’s economic area that there are “excessive” maneuvers. The consensus is not complete: there are those who recognize that what is excessive is uncertainty combined with an overabundance of pesos
“The Board of Directors of the Central Bank of the Argentine Republic today released access to the exchange market for the payment of imports of supplies that left the port of origin before June 27 last,” the entity explained, although it added that the measure has Limitations: it allows the total payment of the purchase as long as it does not exceed USD 4 million and it only allows the payment of up to 40% when the total amount is up to USD 20 million. In other words, in all cases, the Central will not enable more than USD 4 million.
Although insufficient, the measure contributes to decompressing the accumulated tension in value chains and avoiding, at least in the cases of smaller companies, “commercial default” or non-compliance with foreign suppliers, whose link is complex to rebuild. following incurring in a non-payment. The monetary authority explained that the measure only covers “inputs that will be used for the production of goods in the country and that were shipped at origin until June 27.”
The measures known yesterday seek to decompress the accumulated tension in the value chains and avoid, at least in the cases of smaller companies, “commercial default” or non-compliance with foreign suppliers.
Although it has a limited impact, it is the only measure announced yesterday at the official level that provides minimal relief to a sector in tension. On the other hand, instead, the policy of intervention in the financial market was reinforced with more regulations for importers, who now have restricted coverage options, with limits on holdings of securities of foreign companies. There is suspicion in part of the Government’s economic area that there are “excessive” maneuvers. Consensus is not complete: there are those who recognize that what is excessive is uncertainty combined with an overabundance of pesos. They also believe that this decision will not have noticeable effects. In the market, meanwhile, they believe that it will be counterproductive.
“The limitation for companies that go to the Single Market and Free Exchange of holdings in Cedear up to USD 100,000 might lead to a greater degree of uncertainty and exchange nervousness for tomorrow (for today),” said the closing report of markets of Aurum Valores, in which it was highlighted that the monetary authority, in addition to losing USD 50 million, re-issued to support the price of bonds in pesos that were trading down.
To close the combo of the day, from the Government they had to come out late yesterday to “categorically” deny the implementation of a differential dollar for agriculture, a version that began to circulate in the followingnoon and angered both officials and exporters. Among the former, “speculation tending to force the exchange market by restricting the supply of foreign currency” was accused, while among the latter they complained that “These things are not announced, they are published in the Official Gazette. There is nothing, but with this it will be impossible to get someone to sell us soybeans tomorrow. Who is going to want to sell waiting for this?”, asked a source from the export sector.
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