2023-06-01 01:55:30
As a result of the pressure on reserves and following the exchange rate instability registered at the beginning of the month, the Central Bank of the Argentine Republic is evaluating a new standard that would force provinces and municipalities to use own dollars to face debt maturities have this year.
The decision, reported the agency Noticias Argentinas, it would be approved tomorrow at the meeting of the Board of Directors of the highest banking entity and will cover debts issued by provincial and local governments via Negotiable Obligations (ON).
With this regulation, the BCRA will have access to the exchange market for these administrations to buy with pesos up to 40% of dollars that they need to meet these obligations, which implies, at the same time, that they must pay the remaining 60% with holdings in their own dollars, financing or renegotiations in terms with their creditors.
Among the reasons behind the measure, it appears as the main the critical level to which the reserves of the Central Bank have reached, in a context of scarcity of foreign currency as a result of drought in the agricultural sector.
The figures behind the measure of the Central Bank
During the first quarter of the year, the Central Bank, chaired byr Miguel Angel Pesceshould have responded with US$1.2 billion dollars to the requests of public companies and some provinces to cancel debts.
That sum forced the monetary entity to part with of an equivalent to 37% of net sales of dollars that it made in that period and although the implementation of the “soybean dollar 3” allowed it to repurchase US$ 1,400 millionfailed to reverse the negative balance of net reserves.
Source: Argentine News
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