The International Bank Barclay’s stated that the administration of Javier Milei It should increase the accumulation of reservesa concept similar to the one that expressed JP Morgan A few days ago in a report that generated noise at the City of Buenos Aires. In addition, at the local level, analysts realize that the low level of dollars In the coffers of Central Bank Obtura the chances of a sustained decrease of country risk.
In a report sent to its customers on Monday, Barclay’s He argued that “The low currency reserves are precisely one of the main problems of Argentine macroeconomy”.
The financial entity analysts emphasized that “the Accumulation of reservations is key to the success of the programsince it strengthens the credibility of the band (flotation), acts as insurance for bond holders Faced with adverse political changes and increases the possibilities of refinancing debt at sustainable rates. “
For that reason, they considered “Positive” Recent measures to accumulate reservations, in particular, emissions of Bonte bonds. However, they warned that in June “the government was made of alone U $ S500 millionbelow the maximum monthly self -establishment of US $1 billion“
The reservations and the challenge of the country risk
It is precisely the low level of accumulation of reserves that would be slowing down the most important indicators for the Ministry of Economy, that leads Luis Caputo: he country risk. The consultant PXQ He criticized the official position of the government until a few weeks ago, which “disconnected resistance to the country’s risk of the dynamics of reserves and of his decision not to buy within the band (of flotation) “.
The thesis sustained by the Government “was that the country risk had a political component, given the risk of populism from Cristina Kirchner.” However, the consultant added, “the fact that after the former president’s judgment the impact on the Argentine ‘spred’ has been null, The unsustainability of the proposed exchange scheme begins to be clear“
On that point, PXQ stated that “since the compression of the risk of risk requires accumulation of reserves and that, on the other hand, the peso market requires liquidity, the government announced that it will be the treasure who bought reservations and monetures the economy.” It would be “A recognition that the exchange rate will not go to the band’s floor.”
The low level of reservations
According to ADCAP analysts, Eduardo Levy Yeyati and Federico Filippini“The BCRA is dangerously low in reservations.” And they estimated that, if the Chinese swap is excluded, “its gross stock is around US $ 28,000 million, just half of what the IMF parameters themselves suggest as prudent“
Starting from that point, they calculated that the “optimal” reserves of Argentina They should be between US $ 57,800 million YU $ S78.7 billion. “To put it in context, the current level – decorating the swap with China – covers only between 36% and 49% of that range,” they exemplified.
For that reason, and “given the strongly administered exchange rate of Argentina,” they considered that “a reasonable midpoint could be US $ 68,000 million” and highlighted that “that would imply more than duplicate the current reserves.”
Source: Ambito
