2024-07-31 01:13:00
he Central Bank of the Republic of Argentina (BCRA) Foreign exchange markets sell off dollar again International reserves reach US$27 billion July will be the second consecutive month since Javier Milei joined Casa Rosada, with cumulative net sales exceeding $17 billion.
monetary authority $64 million sacrificed Total hard currency holdings decline US$140 million to US$26.992 billion, the lowest level since the last days of February this year. Notably, it had to give up $124 million on Monday.
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According to the exchange operator Gustavo QuintanaThe cash segment transaction volume was US$460 million, the highest transaction volume this month and the highest transaction volume since June 18. at the same time, BCRA accumulated bonus of US$100 million Monthly sales balance exceeded $46 million in May.
Throughout July, hosting entities Santiago Bausili lost $2.954 billion In addition to the economic roadmap projecting a seasonal drain of $2,000 to $3 billion in these months, the drain on reserves has also set off alarm bells on economic dashboards.
Central Bank: Loss of reserves triggers alarm
Regarding BCRA’s poor performance, a report from Portfolio Personal Inversiones (PPI) emphasized that it is not in line with the “already 100% imported products enter the official marketeven if it’s not immediately available.
On the other hand, PPI financial analysts maintain that the center lost dollars due to liquidations and MEP cash intervention, which is an aspect of economic policy. “zero emission“This includes closing the tap on the creation of pesos to purchase foreign currencies in the Single Free Foreign Exchange Market (MULC). In addition to the goal of containing inflation, The strategy aims to control exchange rate gaps.
According to calculations by the stock exchange, Government estimates $253-$261 million in funding for CCL to drop 10 wheels. “At an average rate of approximately $26 million per day, the BCRA may intervene for more than 60 days if it is willing to use all funds in excess of $1.82 billion for this purpose,” they warned.
In fact, the Ministry of Economy has approved the disinfection commitment $2.4 billion in net issuance purchases since April 30. In other words, the operation means that any pesos created to acquire foreign currency will be “returned” through intervention in the bond market, which arbitrates the price of the financial dollar.
“The flip side of implementing this threat is the sudden deterioration in BCRA’s U.S. dollar balance and its U.S. dollar net worth (net reserves) Will increase from an estimated -$6.581 billion to approximately -$8.4 billionassuming the remaining variables remain unchanged, which is an optimistic assumption given its performance in the official market,” they warned from PPI.
For the Investment Director of Wise Capital, Ignacio Moralesone of the main concerns of the market is “Obvious difficulties for the government to accumulate foreign exchange“On top of this, recent steps taken to de-emphasize currency issuance and prepare for a release of the exchange rate mean that foreign exchange losses will be felt in the coming months.”
For Dante Sica, one of the main problems of the labor market is: “Argentina is an economy without credit”
Dollar, stocks and bonds fall
Regarding the behavior of parallel quotations, monetary tightening and official intervention confirmed considerable declines. “The exchange rates of the financial dollar and the parallel dollar continue to fall, US dollar hits $1,270 and 1,380 pesos”, said Aurum Valores.
In line with this argument, financial stocks and blue stocks fell 2.3% and 2.5% respectively on Tuesday. The gap with the official exchange rate is 36.2% and 48%. Before central intervention, the gap in free dollars was close to 60% and over $1,500.
at the same time, Merval plunged 4.68% daily, Driven by the shrinkage of leading stock sectors. Sociedad Comercial del Plata suffered the largest decline, with a decrease of 9.48%, followed by BYMA (-5.71%), Central Puerto (-5.60%), Transportadora de Gas del Sur (-5.40%) and Pampa Energía (-5.30%).
Finally, USD-denominated sovereign bonds also experienced volatility, with AE38 (-2.93%), AL35 (-2.60%), GD35 (-2.72%), GD41 -1.90%) and GD36 (-1.89%) all experiencing retracement . at last, Country risk edged up 0.2% to 1,556 basis points.
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