The Limited Times

Now you can see non-English news...

For economists come more restrictions with the saving dollar

2020-08-25T01:49:10.983Z


In the Government they assure that there will be no changes in the saving dollar. But experts say that the reserves are at a critical level. Expectation of what may happen after the exchange.


08/24/2020 - 21:21

  • Clarín.com
  • Economy
  • Economy

Dollars are scarce. Or at least in a market in which few players appear from supply and where orders do not cease from demand. The official intention is that there be foreign currency so that the sectors that need to import, in pursuit of the long-awaited reactivation, can do so.

They deny changes in the savings dollar, the possibility of buying US $ 200 a month , and they trust that after the debt swap and also the presentation of the 2021 Budget project, the pressure on the exchange market will moderate .

But analysts do not see an easy solution: they reason that from the supply it is difficult for more exporters to appear or that new debt can be taken on, so the changes should take place through greater restrictions or a rise in the dollar, although there could also be changes in the interest rate that would take pressure off.

Lorena Giorgio, from Econviews, said that the ideal would be to generate confidence and saving alternatives in the currency itself , something that in the case of Argentina still seems distant. “Until now, an attempt was made to contain the demand for dollars by adjusting quantities, that is, limiting the amount that savers can buy, and putting obstacles in the case of importers. But the margin to continue adjusting in this way is already very small, and its greatest consequence would be to continue widening the exchange rate gap, ”she reasoned.

That is why you think it may be time to start adjusting something via price. "If you look at previous episodes, only a devaluation of the official exchange rate could reduce it, and not a drop in the parallel dollar," he added. In fact, he pointed out that Econviews expect "an exchange event in the short term", although it is difficult to predict the "timing" in which it will occur.

For Federico Furiase, from EcoGo, it would be key to give a credible fiscal signal in the framework of a negotiation with the IMF. And he highlighted an aspect little known so far: that the Central Bank has in its portfolio bonds for about US $ 13,500 million that enter the debt swap so, after the restructuring, the monetary authority could sell them to decompress the exchange gap (and, at its option time, take pesos from the market).

"Another possibility could be if the dollar bonds rise post-exchange (country risk decreases) and decompresses the gap in that way, the BCRA could sell part of the bonds against dollars to rebuild net reserves without expanding the monetary base," he added.

It also assesses the possibility of raising interest rates, particularly those offered in debt bids in pesos made by the Ministry of Finance, or issuing securities tied to the dollar. "But the main signal has to be the prosecutor," he stressed.

In a similar vein, LCG's chief economist, Melisa Sala, mentioned that there are few alternatives. “There will only be more dollars if more is exported or if there is debt; neither are available in this context ”. That is why she believes that perhaps with the interest rate it will help, although she doubts its effectiveness given the grip on the exchange market.

Matias Rajnerman, from Ecolatina, also ruled out the possibility of more exports or debt placements in the short term. "To lower the dollar appetite, it would be necessary to reduce uncertainty, which is not likely in the immediate future (even with the debt issue closed), or to improve the yield on loans in pesos, that is, raise the interest rate" , he mentioned. "Otherwise, it will have to tighten the stocks or accelerate the rate of devaluation, with all the negative impact this has on activity and inflation," he predicted.

The purchase of dollars for savings has been breaking records since June, both in number of buyers and in amount. For now, to avoid an exchange rate jump that accelerates inflation and aggravates the regressive and recessive impact of the pandemic, the Central Bank sold more than US $ 1.2 billion of reserves between July and the first half of August, Ecolatina reported.

The result? Even with a trade surplus, net reserves are today below US $ 10 billion, " a critical level that could lead to further adjustments in the foreign exchange market."

Source: clarin

All business articles on 2020-08-25

You may like

Trends 24h

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.