Monday , October 18 2021

BCRA relies on the ability to stop a possible exchange process


At the Central Bank, they invest rates on Treasury Dollars and futures sales to halt possible activity. They say they are backing up a stock that could be dollarized

The favorable external context and the high level of interest rates increase the willingness of the peso, which complemented the balance of trade balance. creates pressure on the dollar.

At the central bank, they pointed to this oversupply and this is confirmed Today, the daily surplus of this dollar is $ 100 million, something key to maintaining exchange stability.

In the future, beyond the moment of the foreign exchange market, and given the fact that the election year always creates an extra dollar for investors, they are confident that they will be able to stop the possible exchange rate. They believe that their shooting power comes from 2 to 1 relationships with a stock of assets that could be dollarized.

"Last June, we thought we had $ 500 million dailybecause there were people who bought dollars for the savings they bought for import, and the exporters practically did not sell because they had suffered drought. Today, this number is a nearly $ 100 million daily surplus, ”says the Central Bank.

"This change is significant and explains the many things we see in the financial market and the foreign exchange market these days," he adds.

The fact that pax exchange is the one that allowed the monetary authorities to accelerate the low rate of money on the last wheels and that it increased the purchase limit of USD S50 million to USD S75 million dollar dollars to inject pesos when the currency is running below the intervention zone.

If the exchange rate stays out of the currency range, speculate in the company, the higher purchasing power would make it faster in the short term.

"Increasing Purchase Limit, We Assess True Demand Will Be Saved In Pesos, And That's What We Want To Expand. Of course, it helps to reduce the rate, although we look at the impact on aggregates, ”they explain from the company.

Anyway, I know that in the election year this summer exchange will not be long. "The True Dollar Thriller is Elections," they say Reconquista 266 and claim to be more than ready for the moment.

Strictly speaking, in the Center, they analyze a stock of potential assets that could put pressure on the exchange rate and compare it with the two main instruments that they have to reimburse for the following offer: the dollars that will be transferred to the Treasury and that they are going to sell on the market and BCRA at that time. future agility.

"When we look at it and compare it to stocks that are substitutable, today we are talking about almost 2 to 1 ratios," they say. confident And they add: "We do not find the number of requests that could explain that the exchange rate fluctuates within the 30% range. We believe that even dollars have remained in the dollar exchange rate scenario.

The account they make at Reconquista 266

If you analyze in detail the account they make for BCRA, you can see nearly $ 10,000 million that the Treasury could sell, as well as about $ 3,000 million that a monetary agency can sell in the end of September.

On the other hand, they take into account all the property of foreigners and the recent surpluses of pesos, such as the increase in fixed-term maturities from September to now. "We have more than double what we value, the dollar is", "they provide and compute between $ 4,000 million and $ 5,000 million, which is a possible demand.

With these figures in mind, they also set a new foreign currency buying limit to inject pesos into the economy because they know that any peso can be a potential dollar demand.

"Before the elections, people may be afraid and dollars. We control this with weight generation too. That's why we are cautious and the more we create, the more we fear for the future.they explain.

In this way, they calculate the strength of the fire, and they have another important tool that is important in the context of monetary compression: interest rates. Although they are not aware of it publicly, they know in the government that they are willing to take the stakes to the level necessary to stop the dollar, despite the recessionary impact it may have on the economy.

It is until the currency threatens to shoot outside the intervention area. To overcome these values, BCRA is another weapon of $ 150 million, which the International Monetary Fund (IMF) allows them to sell on a day-long basis, although they trust in not achieving this. "Honestly, we think it's not necessary," they discover.

Slow slow inflation

On the other hand, at the top of the body, it is believed that the impact of monetary adjustment on inflation will be observed before the elections, and they expect the price index to be reduced.

"This will take time to reduce inflation and may not be linear. But we are confident that this system, with discipline and perseverance, will lead to a more sustainable decline in inflation. It's not a quick process, but in the second and third quarters we'll see a little more of what we do, ”they say.

The year is long. The first month's balance with the Central Bank was more than positive, with falling rates, the dollar below the intervention area and the decline in the Leliqs stock.

But they can't win. They know that the election creates extra noise in the currency market, and from now on they want to be ready to play this game, which relies on the fact that they will win two against one.

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