2024-05-10 00:37:13
He Banco Central (BCRA) almost caught the market with its pants around its ankles with the new cut in it interest reference (that of passport). Although it was assumed that it was going that way, they didn’t expect it to be this fast compared to the previous cut.
With this move will BCRA sent a signal that, on the one hand, he is comfortable with the level of exchange gap and that presupposes the risk of aggressively lowering inflationon the other hand, it is possible that inflation is slowing faster than expected, and that the axis of the economic program continues to be fiscal soundness, floating pesos and exchange rate anchors.
So it was decided to lower the rate on Monetary policy at 50% nominal annual rate (4.25% effective monthly), well below what inflation.
On the one hand, this has a great advantage for BCRA which is, in addition to floating interest-bearing monetary liabilities (Central debt with banks and joint funds), which reduces the interest payment on that debt.
The last two days of April still have to be counted, but the data for Banco Central shows that monetary growth is close to nearly 6.6 trillion pesos. Of this issue, 2.7 trillion pesos correspond to the purchase of foreign currency, 1.7 trillion to the operation of BCRA in the markets and the rest for payment of interest. That is, the interest payment in April amounts to more than 2.1 trillion pesos.
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In order not to leave all this discharge loose in the street, BCRA It absorbs excess liquidity through the placement of new repaid monetary liabilities, and by selling foreign currency to the Treasury. Today, the balance of the central debt amounts to almost 35 billion pesos, when Monetary base That’s 14 billion pesos (all the money issued by the BCRA).
So it is clear that the remunerated monetary obligations to Banco Central They grow mainly via interest payments and currency purchases in the foreign exchange market. With the new rate, the issuance of pesos to pay interest will fall to 1.4 trillion pesos this month. But if purchases of foreign currency are maintained, one can expect at least a monetary growth of almost 3 trillion pesos more, at a time of greater export unwinding. That is, for both concepts, the emission will be more than 4.4 trillion pesos.
On the other hand, Are the new interest rates enough to limit monetary growth in the coming months?
We have already seen that with the new prices BCRA manages to lower the issuance of pesos due to the payment of interest on reimbursable monetary obligations. “The point is whether this reduction is enough to stop paid liabilities from growing,” say the analysts at management company MegaQM.
A minimum level of monetary expansion of more than 4.4 trillion pesos implies an increase in the base equivalent to one-third monthly. “This expansion goes far beyond expectations for growth in real demand for money – expected inflation below 6% – so progress will still be required on two fronts,” the manager points out. Let us see.
On the one hand, initially BCRA It will probably sterilize the excess pesos, but within the framework of this edition, it is clear why the decision was taken to start activating the subscription to the bonus for importers (Bopreal) for companies that have pending issuance of dividends, because this channel needs to be reactivated in order to reabsorb weights without sterilization costs.
On the other hand, the Treasury is also expected to take an active role, seeking to capture pesos in the debt market and then use that liquidity to buy back debt or currencies at the same time. BCRA. This would be another mechanism that would help reabsorb weight.
In short, the previous arrangements may be in effect, combining in various doses with the aim of preventing the stock of pesos from increasing in real terms. We’ll see.
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