Maximum vigilance in the Government due to the failure of the Central Bank to seize dollars. The other options are handled by the economic team
With Claudius Zlotnik
06/08/2022 – 07.02 hours
at least four independent economistswhich are outside the Government and belong to different ideological slopes, Sergio Massa was advised to take urgent measures that would allow the Banco Central to recover the buying position in the foreign exchange market to increase reserves.
In front of all the interlocutors with whom he has interacted since he took office as a minister, Massa did not rule out. devaluation, strongly. Likewise when he mentions the chance that exchange rate split. He doesn’t even want the possibility of taking that leap.
The situation seems urgent: this Friday, the Central Bank sold another US$95 million in the official foreign exchange market, and the dynamic is not slowing down: sales of foreign currency came to avoid devaluation. u$s700 million in this first week of August alone.
The new minister held a round of consultations during the week. He spoke for three hours with Marina dal Poggetto -who refused the offer to join the economic team- and who talks to them daily Emmanuel Alvarez Agis. The Minister keeps in touch with all the economists who accompanied him from the plains: Martin Redrado y Miguel Peiranoamong others.
The continued fall in reserves is a major cause for concern: the exchange rate gap defies any stabilization plan.
After the sharp fall they showed up Alternative dollar quotesthe uncertainty about what would happen in the short term halted that downward trend.
Dollars are missing in the reserves: what can Massa do?
A devaluation in the official market or a split in the exchange rate is rejected, the other options heard by the Minister are reduced. The IS “something has to be done” aligned with the possibility that sharp rise in the interest rateby the Central Bank.
“It cannot be that the banks give free lines to the agricultural producers, which are the same ones that we want to liquidate so that the exporters bring the foreign currency to the Central Bank,” they say from the economic team .
From the environment of the minister they put under a magnifying glass Miguel Pesce. Alberto Fernández strongly supports the leader of the BCRA. Massa succeeded in placing Lisandro Cleri in second place in the Bank’s structure. However, it will be necessary to watch as the days go by if Cleri manages to gain access to the keyboard of the strategic table, the operations table of the Central Bank. Something that Mártín Guzmán failed to do.
Will dollars come from abroad?
For now, the idea is foreign banks Argentina’s financing through “repo” credits (with guarantees) seems far-fetched. Basically because, in the middle of the crisis of confidence, the debt bonds are worth very little and three or five times the capital that foreign banks are lending would have to be put up. Not more than US$1,000 to US$2,500 million. Little, in relation to Argentina’s needs.
Massa, what was said above, opposes a sudden devaluation. He expressed it through his staff. “Vasco” De Mendiguren, for example, said in the last few hours that “there is no possibility of a sudden devaluation.” In any case – and this the new minister does not even have to admit publicly-, there could be a discreet jump in the exchange rate when central bank reserves.
Exactly what you cannot access now. Until the dollars come that allows us to think about that possibility.
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