The Limited Times

Now you can see non-English news...

The Central Bank bought US $ 101 million and now evaluates when the interest rate rises

2023-05-12T22:16:28.249Z

Highlights: The Central Bank does not report the real amount of net reserves, which last week had been negative by just over 1,000 million dollars. The delay in raising the interest rate a month ago, when March inflation was known to be 7.7%, was the spark that ignited the exchange rate run that took the blue dollar to the edge of 500 pesos. The wholesale dollar was this Friday at $ 230 pesos, just under half the value of the dollar counted with liqui, which closed at $ 464.


Positive day for reservations. With the jump in inflation to 8.4%, Miguel Pesce is forced to raise the monetary policy rate, which today stands at 91%


On the fateful day when April's inflation was known, the Central Bank had the consolation that it managed to close the wheel with a positive balance of 101 million dollars. The bulk of that figure – US$ 95.8 million – was settled under the soybean dollar modality 3.

Precisely the BCRA stressed that for this operation, which expires the IMF, US $ 2,476 million have been liquidated, exactly half of the US $ 5,000 million that were projected when the operation was launched.

The wholesale dollar was this Friday at $ 230 pesos, just under half the value of the dollar counted with liqui, which closed at $ 464. The blue parked at $474.

The Central Bank does not report the real amount of net reserves, which last week had been negative by just over 1,000 million dollars.

What is known is that the Chinese swap is being used so that Argentine importers pay for their purchases from Chinese suppliers with that money. Sergio Massa warned that between now and August about 4,000 million dollars could be used.

In practice, it is like borrowing from China for the amount that is being used. The financial cost is around an annual rate close to 9%.

In parallel with the evolution of reserves, the market began to wonder this Friday, after knowing the CPI for April, what the BCRA will do with the monetary policy rate, raised to 91% nominal annual days ago

tag. One question is whether the board headed by Miguel Pesce will wait until Thursday to eventually modify the rate, or will do so before May 18. In the market they point out that with inflation traveling above 100%, a new rise would be inevitable. The 91% nominal annual rate (TNA) equals 140% effective annually. Taking TNA to 95%, for example, ASD would jump to nearly 150%.

Of course, by raising the interest rate, the Central Bank is forced to pay more interest on the debt that, in the form of Leliq and passes, it has taken with the financial system. Today it is paying almost a trillion pesos of monthly interest on that debt, whose stock is close to 14 trillion pesos.

The delay in raising the interest rate a month ago, when March inflation was known to be 7.7%, was the spark that ignited the exchange rate run that took the blue dollar to the edge of 500 pesos.

That is why it should not be ruled out that before Thursday the Central Bank says something about the monetary policy rate.


Source: clarin

All business articles on 2023-05-12

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.