2023-05-18 21:42:00
“I accept the exchange pressure, don’t screw it up”, they heard him say to the Minister of Economy, Sergio Massa, in the last hours. At the Palacio de Hacienda they affirmed that the sharp jump in financial dollars, about $30 so far this day, is a “strategic decision” to end “speculative operations and financial curls.” These are possibilities that arose after the economic team had decided to intervene with bonds to stop the currency run.
After that official intervention – weeks ago and with a supposed endorsement from the International Monetary Fund (IMF) – the possibility of earning up to 20% with exchange operations in just two clicks through any stock operator had already become popular in the market. There were at least two well-known options: one involved buying the MEP dollar and then selling LEDs; the other, the classic puree (buy dollar bag and then sell in the blue or informal).
“It is not because the IMF asked you, nor because of reserves”, counted in the Central Bank (BCRA). “The problem is that you had two different prices. The volume of the MEP went up a lot because of the different curls you could do. Today you cut that. today he died spread”, added the sources aware of the decision made today by the Ministry of Economy.
In Economics they counted THE NATION that in recent days there had been a strong demand, somewhat striking, for the bonds operated by the BCRA. “This demand was purely speculative, caused by domestic market operators who used the BCRA’s offer for the daily purchase and sale of titles, executing a dollar purchase and sale process that yielded strong profits,” They said and added: “From day one, the Ministry of Economy, together with the BCRA, defined that the strategy was to give stability to the exchange market through the offer of bonds in the secondary market. The speculative demand of ALs for financial curls goes against this strategy”.
As indicated in the Palacio de Hacienda, for this reason, “we decided to let the financial dollars implicit in the prices of ALs (a type of Bonar) run”. They also added that later the “stabilization of financial dollars with a price level more similar to that of the dollars implicit in the rest of the financial assets”.
“There is no doubt that once the prices normalize we will continue with this strategy, which was totally efficient to stop the run last month. The BCRA has the necessary tools to do it”they added.
the MEP dollar through the purchase and sale of GD30 bonds appears on the screens of the capital market at $474.55. They are $30.50 more compared to the previous wheel (+6.9%). Thus, it marks a new nominal maximum. The same trend is replicated in cash with liquid. If the saver buys bonds in AL30 pesos for their subsequent sale in dollars, today the value is around $487.93, a rise of $22 compared to the previous close (+4.8%), a rise of $32 compared to the previous close (+ 7.3%).
“They matched the operations against our intervention price,” sources on the fifth floor of the Palacio de Hacienda told this medium. “They earned money doing nothing, rolling shoes for 48 hours. That of the IMF not letting us intervene is installed by some who are now barefoot. They’re desperate for us to get in.” they said.
There was speculation in the market that the entity led by Miguel Pesce had run out of ammunition or that the IMF had demanded that the Government stop intervening in the exchange market if it wanted an advance of funds. In the last weeks, it had come out that the Fund was asking Massa for a 30% devaluation to deliver dollars.
The negotiation with the IMF continues its course. In fact, THE NATION He said yesterday that the Economy Department let it be known that the amount of disbursements that the multilateral organization could advance is no longer debated, but that the focus would have been on the percentage of those funds that could be used to calm the official exchange rate in a context.
According to the version of the Palacio de Hacienda, the IMF is offering an amount that is low “understanding that it is an election year,” they said. Massa claims the possibility of using 60% of the Fund’s disbursement. The organization directed by Kristalina Georgieva would be offering 20%. The minister is working on the possibility that the Fund advance – “frontloading”, in the jargon – the more than US$10,000 million in disbursements that remain between June and the end of the year.
“We are evaluating the measures. As we have said before, we continue to discuss ways to strengthen the program and safeguard stability in light of the severe drought.” an agency spokesman said after the inflation-linked announcements last Sunday. “This includes policies to improve fiscal sustainability and build reserves, both essential to reduce inflation, while protecting the most vulnerable,” he added then.
The impossibility of using dollars from reserves and bonds to intervene in financial prices was reflected in point 26 of the memorandum on economic and financial policies that corresponds to the last review of the agency’s staff in March of this year. However, in the midst of the latest currency run, Massa notified the Fund that he would intervene in the market. And he finally did. Now, according to the information that emerges from the Economy, there would be an endorsement from the organization given the imminence of the elections and due to the impact of the drought.
“If you want to know why lately we have been seeing the BCRA buy foreign currency, but at the end of the day it was losing reserves, here is the explanation. In ‘Others’, which mostly goes to dollar intervention, US$112 million per day have been ‘burned’ since May 5. It loses US$ 562 million from that day”wrote the economist Salvador Vitelli about interventions to contain the dollar.
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