Tuesday , March 21 2023

Why does the central bank not stop buying dollars now? – 01/14/2019


On Thursday he bought $ 20 million, Friday US $ 40 million, and Monday another $ 50 million. The Central Bank he is now focusing on buying foreign currency, but he can't get a price so that it can grow significantly.

Early in the week The dollar to the wholesaler ended in US $ 37 and $ 38.06 for a retailer in an exchange rate climate that is characterized by a larger supply of banknotes, given the apparent weakening demand.

Both the Central President and Guido Sandler, like vice Gustavo Cañonero, they are very cautious about the rising exchange rate over the last few weeks.

However, government sources point out that ldecision to buy more dollars BCRA answers the fact that both companies and individuals are requires more lingerie.

This process started in December when demand for opposite to dollaringHe grew up above forecasts The Central Bank official expected that this demand could be secured by increasing the amount of money by 6%, and finally, It turned out to be 10%.

Thus, both companies and depositors they got dollars to get pesos partly to meet the payment obligations, but also to use the high interest rates that banks still pay against the upcoming inflation in the coming months.

The dollar depreciated last month and the beginning of this year coincided with changes in the trade balance result.

Rapid drop in imports recession heat it was crossed with export improvements, albeit modest. "Today there are five dollars of exports for every one that is required to import" provided the famous local money changer.

But the background curtain financial silence is explained because interest rate pesos and a quiet dollar opportunity Powerfulness short term deposits in pesos.

Badlar rate (over one million pesos for deposits) is 44.69% year and the lower amount of fixed term around 43.76%, that is, both, despite the fall, they are positive against this year's inflation projections, which represent about 30%.

These high rates in real terms offered to peso holders, in turn, are due to the fact that the Liquidity Bills (Leliq), which the head office places in the banks to earn a return on the market, pay 57.80% pa. The Center continued to downgrade. T. Leliq at the beginning of the week It was set at 57.80% per annum. It is worth remembering that in October 2018, when the new monetary regime began, the rate was 70% and last year it was about 60%. While and how fast will it happen?

At the center, they refuse categorical predictions about the subject, realizing that this is a question precisely and it depends largely on expectations that arise around the silence of the exchange rate the market has experienced.

Operators emphasized the statement of the Minister of Finance Santiago Bausilirelating to the Treasury will sell $ 10 billion from April to market to meet fiscal needs.

These are IMF dollars that are added to the income that comes from. T. wheat, corn and soy and strong front the demand for foreign currency imports is decreasing they determine the fluid exchange system for the first part of the year.

It is clear that the new system also responds to variants a the international financial situation is less scared on the possibility of a rapid increase in the interest rate in the US and therefore responds to less risk aversion and revaluation of the currencies of some developing countries.

Interest rate management is a cause and effect as well as an official priority consolidate dollar stability trying to convince the price indices at the beginning of 2019, which are already loaded. The delicate financial chess offered by the government needs to be moved with great caution and everything points out real economy requirements they have to wait.

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