The Buenos Aires Grain Exchange confirmed what had been predicted and that is that this year
US$ 14,000 million less will enter than in the previous agricultural campaign
.
The drought that has been affecting planting and production since the end of last year peaked over the weekend after
record temperatures
that explain, for example, the 45% drop in wheat production compared to the previous season.
For the Central Bank, the drought reveals to officials that already in January they registered a
significant drop in foreign currency settlements
that, on average, reached US$ 42 million per day, falling 64% compared to the same month of the previous year.
For this result, the lower exports due to the drought and the early settlements at the end of last year of soybean dollars 1 and 2, which contributed US$ 11,000 million, converged negatively.
The confirmation of the forecasts about the decline in the inflow of dollars
adds pressure to the exchange market
and, especially, to the Central Bank, which has been losing reserves.
A recent report by Fundación Capital highlights the fact that the
"net reserves" of the BCRA are around US$ 2,000 million,
and that they are far from being able to reach the accumulation target agreed with the International Monetary Fund of
US$ 5,500 million. for March.
The exchange dilemma worsens for the Government in the election year.
The economy minister's firm intention is
to avoid a jump in the official dollar at all costs
because he knows that a devaluation increases food prices and that further decreases the purchasing power of wages.
With the logic of electoral politics, the Government would seek to delay the dollar a little more towards the middle of the year if market conditions allowed it, but the data from the last years of management do not favor it.
The report adds: "after two years in which the official exchange rate verified arrears, there is no margin to continue with this dynamic" of using the dollar as an anchor to contain inflation.
In 2021, the "exchange rate slipped 22.15% compared to a 50.9% rise in the cost of living index" and last year, despite increasing the rate of devaluation, the
dollar rose 72.4% while inflation ended at 94.8%.
For this Foundation, the official dollar is
26% behind
the average exchange rate of Argentina's trading partners and 38% behind in relation to a good moment of external sales that was the period 2003-2011.
And to this is added
the 6% of inflation in January
that would add pressure to Massa who, on the one hand, would need to lower the rate of rise of the official dollar in an attempt to calm down the price indices but, on the other, increase it to try to bridge the gap with the free dollars.
At this crossroads, they insist to the government that
the signing of an agreement with an international bank
to obtain US$1,000 million for a Repo is imminent.
A Repo is a transaction contract for an asset with a repurchase clause and there is a delicate point for the operation by the Argentine government.
In general, the Repos impose a
guarantee of 2 to 1
, that is to say that to be lent US$ 1,000 million, the Treasury would have to put a nominal US$ 3,000 million in 100% bonds but, since the bonds are quoted around US $33, the Treasury would have to guarantee an
approximate number of US$6,000 million in bonds in addition to paying a rate of 9%.
The Government's bet is to achieve the Repo and reach an agreement with Brazil in the short term to advance compensation in bilateral trade as a means to use fewer dollars but, in this case, the times are controlled by Itamaraty
.
Inflation in January, on the other hand, hits the side of the pesos hard and puts pressure on the interest rate level set by the Central Bank.
Until now, the reference rate at 75% per year has been acting as an
efficient vacuum cleaner for pesos
by the Central Bank and this is demonstrated by the rise in fixed-term loans in banks.
It has also been allowing the Treasury to finance itself to cover short-term debt maturities in what constitutes another sensitive point.
The Treasury continues to find it
very difficult to extend debt maturities beyond July
and that comes from before Juntos por el Cambio warned about the amount of debt in pesos that the future government could receive as a financial inheritance.
The interest rate at 6.2% per month (will it be enough to contain the pesos?) and the gap between the official and free dollars of 94% return to the center of the scene.
The fleeting idea of the Government of having broken, even at the heights, the inflationary inertia by lowering it from 6/7% to 4/5% per month by the end of 2022 once again demonstrated that the patches, in this matter, do not last
long
.
The 6% rise in the cost of living in January adds pressure to both the pesos and the dollar side and, above all, continues to hit pockets hard.
Again and they go...
look also
Only 4 countries in the world have more inflation than Argentina
The 6% in January complicates activity and economic management