Buenos Aires, May 13 (NA) — In the midst of high inflation, it was learned that the Central Bank issued another $150,000 million this week to assist the National Treasury.
These are Transitory Advances (AT) granted last Tuesday just 72 business hours after receiving $140,000 million to finance a once again growing fiscal deficit.
The Treasury had already consumed 99% of the assistance goal set forth in the agreement with the IMF ($373 billion for the first semester, because it had received other transfers of $100 billion on April 21 and $130 billion on April 17). March), so with this new twist the Government adds a new breach of an explicit goal enshrined in that understanding.
Economists consider it counterproductive to accelerate the use of issuance in the midst of an inflationary escalation that brought the cost of living to 8.4% in April and predicts a 9% escalation for May.
The economist Luis Secco affirmed that there were $290,000 million of Temporary Advances from the BCRA in six business days of May.
“The machine for printing pesos continues to work at maximum power. Overall, inflation did not give 8.4% in a month (which is equivalent to 165% in a year) and the issue has nothing to do with it,” said his peer Juan Ignacio Paolicchi, from the Empiria consultancy.
In addition, he estimated that “with the new shipment they already used $520,000 million in the year when the goal with the IMF until the end of June was somewhat below $373,000 million.”
Paolicchi assured that the economic team “adds another failure to meet the goals after having failed to meet the reserves in the first quarter and will probably also fail to meet the fiscal one.
complete. We will have to see what enters into the current renegotiation.”
“To the extent that the shipment is not returned in the remainder of the current quarter, we will be facing another goal failure,” warned economist Salvador Vitelli, from Romano Group.
The requirement is linked to the impact that the drought had on the performance of collecting taxes associated with foreign trade.
This means that revenues, for a few months, have not even kept pace with inflation, which shows that they are falling in real terms.
At the same time, official efforts to try to accommodate spending at this level of income were insufficient, so the deficit grew again.
The problem is that the sustained issuance, in the current context of rising inflation, is what drives the bad expectations about a possible further depreciation of the local currency.
The BCRA, aware of the impact that the uncontrolled release of pesos has on the economy, strives to try to sterilize (withdraw from the market) a good part of what is issued.
In this way, it increases its remunerated debt (and at an increasingly higher rate), in a context in which it continues to lose reserves (they are in negative territory if measured in net terms and at the lowest level in the last seven years if you take the total made up of all types of loans) and damage your assets.
The monetary authority not only orders pesos to be printed or placed on the market through this type of transfer.
It also does so when it pays the interest on its debt ($2.8 trillion were released this way in the first quarter of the year), when it buys reserves (a way through which it withdrew some $450,000 million given the more than US$3,200 million of its reserves, which it has lost, but which should become expansive in the coming months since it no longer has much to sell), when it issues more to make those same purchases more expensive due to the imposition of the soybean dollar or PIE III (about $140,000 million more) and when it rescues bonds from the market to try to sustain their prices.
JC/PT
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NA 05-13-23 11:46:14
Source: Ambito
