2023-07-11 09:14:10
With the abrupt drop in bookings in recent weeks, The only thing that the Central Bank has its own is US$4,000 million in gold bullion, part in Buenos Aires and part in London, and that is not enough to pay off all its liabilities in dollars.
Given that the net reserves are negative in US$5,000 million, even by selling all the gold the BCRA cannot meet all of its external liabilities, calculated the Econometric consultancy.
How the Central Bank finances the Government by expropriating dollars
In 2008, the Central Bank had almost US$50 billion in net reserves. Since then the State was expropriating all the dollars from the BCRA, removing the foreign currency in exchange for placing public debthe maintained in a report.
Before 2002, the BCRA did not finance the State and therefore had almost no public debt in its assets, but 20 years later the Central Bank has in its assets US$110,000 million in public titles and transitory advances.
The methodology of removing the dollars and leaving the BCRA balance only with public debt continues to date. In fact, last week the Government placed debt for US$2.700 million to keep the yuan and SDRs (IMF exchange currency) of the Central Bank.
Central Bank: the fall in reserves to avoid devaluation
BCRA reserves fall sharply in the first half of the year, before a BCRA that liquidates dollars at half price in the official market of changes, added to the need to pay the foreign debt with private parties and the IMF. In the first half of the year, gross reserves fell by US$16.7 billion, Econometrica said.
During the month of June in particular, the BCRA sold US$944 million in the official exchange market, operation that was possible only because the swap with China was activated.
Whose dollars are sold by the Central Bank
He BCRA ran out of its own reserves. All the dollars it has in reserves are from the private sector or are foreign debt (against the IMF or against China). With nothing of its own to sell, at the last minute the government managed to activate the Chinese swap, supposedly for US$10,000 million.
In June, he used the new credit to sell US$944 million in the exchange market, but he also used Chinese credit for another US$1,000 million to pay the IMF with yuan.
In other words, in June alone, at least US$2 billion of the Chinese swap was used, half to sell dollars at half price on the official exchange market and the other half to pay foreign debt to the IMF.
But gross reserves fell by an even greater magnitude as the BCRA also used US$1.7 billion SDRs to cancel the debt with the IMFin addition to the fact that reserve requirements fell by US$700 million in the month.
In total, gross reserves fell by a little more than US$5,000 million only in June and accumulate a drop of US$16.7 billion in the first half of the year.
How reserves collapse in the face of the IMF agreement
To have an idea of the magnitude of the collapse of the BCRA reserves, it is worth noting that the agreement with the IMF established as a goal that the Government accumulate a stock of net reserves of US$9.1 billion for the month of June.
The IMF’s goal was to accumulate a stock of net reserves of US$9.1 billion by June.
However, net reserves closed negative, with a shortfall of US$5,000 million in the middle of the year, which implies a gap of US$14,100 million with the goal established by the IMF.
According to the criteria of the Fund, to estimate the net reserves of the BCRA, the liabilities in dollars that the BCRA itself has are subtracted.
That is, in billions of dollars that gross reserves (27.9) are mainly subtracted from reserve requirements (10.5), the Chinese swap (18.1) and the debt with the BIS (3.1). , leaving negative net reserves of US$5,000 million. That is to say, the BCRA has more foreign liabilities than foreign assetsEconometric concluded.
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