The Minister of Economy lowered the economic policy reference rate and freed banks from paying savers a minimum of 9.1% monthly for fixed-term deposits.
The reduction from 100% to 80% annually (6.6% monthly) of the rate for monetary liabilities that the Central Bank pays to banks, and the elimination of the minimum rate for fixed terms, came into effect immediate and translated into the possibility of a significantly lower income for
placements in pesos
.
The deposits that on Friday, March 8, offered 9.1% monthly to depositors, on Tuesday the 12th
paid, on average, less than 6%
.
A first reading from financial operators was that
Luis Caputo
was playing three ways: 1) discouraging banks from taking a fixed term and then lending the money to the Central Bank, 2) lowering the interest payment for the "mountain" of monetary liabilities and 3) giving some air to the financial dollars (Mep and cash with liquidation) that with the gap at 20% could discourage the liquidation of exports.
But the search for arguments is insufficient to explain the move in the face of an equation of three economic variables that remain in a false square.
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Manuel Adorni referred to the work of the economic team and said that "they are satisfied."
With February's cost of living
increase
, the scheme shows
inflation
rising 13.2%, the
interest rate
at 6.6%, the official
exchange rate
rising to 2%.
What would be the anchor to contain an annual rate of price increases of 276.2%?
A repeated response of the government is to have a fiscal surplus, but the sustainability of that result is not assured over time.
In fact, the numbers show that the bulk of the adjustment rests on the
liquidation of retirements
, a result that is difficult to sustain.
Added to this is the negotiation over taxes between the government and the governors, which appears difficult and without a sustainable resolution in sight.
But even assuming that the government is betting on the
fiscal "anchor"
, the drop in the rate already had a first reflection the next day in the 5% rise in the Mep dollar ($1,046) and 4.2% in the CCL to $1,067.
The drop in the fixed-term rate and the decline in the dollar is presented as a textbook result in Argentina but, perhaps, the minister wants to film another film related to the
profit in dollars from term placements in the last month
They were definitely very important.
Could it be that Caputo is not measuring the "negativity" of the interest rate against inflation, but rather the "positivity" of the rate in pesos against the fall of the blue dollar since January?
Blue fell 13% between the end of January and the end of February
.
To that we would have to add 9.1% for the income of a fixed term to round out a more than important profit in dollars.
It will be that "carry trade" that the minister is looking at, or the two sides of the moment that the economist Carlos Pérez presented in a report reserved for investors about the decline in financial dollars.
The report maintains: The classic
"joint"
is unraveling, so it is now more supply than demand given the fall in real wages in a situation of "deep recession."
Also, he adds that 20% of exports do not go to the BCRA and feed the supply of financial dollars and the validity of the exchange rate.
These three elements: "canute" (savings in dollars), "blend dollar" (80% official, 20% CCL) and exchange rate stocks contribute to putting the focus on an issue that continues to reveal itself inside and outside the Economy: the official dollar Will it continue to move at 2% monthly after March?
If we review the inflation tripod of 13.2% in February, rates of 6% monthly and devaluation of 2%,
the first answer would be no;
because then the dollar would return to a situation of backwardness and the liquidation of exports and, for example, the commitment to the IMF to show US$ 10,000 million in the Central Bank's reserves would enter the risk zone.
Updating the dollar at 2% monthly, the result in terms of moderating inflation is visible with 13.2% in February (January, 20.6%) when the sharp
drop in sales
and the expectation of deepening recession.
Caputo now faces, and after the Central Bank purchased US$7 billion for reserves,
the old Argentine exchange dilemma
: if it devalues it may favor the liquidation of exports, but also a jump in inflation.
And, if you do not do so, you will be able to moderate the price increase but you will put the obtaining of dollars at risk.
The Minister insists that he is not thinking about devaluing and even the market has been acting accordingly.
He is betting that the outcome will be an acceleration of 2% to 4% or 6% in the pace of devaluation and that this will not significantly affect the cost of living.
Of course, the market was also betting on the need for a positive real rate in pesos to help control the dollar and Caputo lowered the rate because he would have considered that they were gaining a lot, in dollar terms, by placing the pesos on a fixed term.
The exit can go the other way.