According to the latest report from the Central Bank entitled “Exchange Market Evolution and Exchange Balance” published last Friday, in October 762,000 people bought savings dollars, the highest figure in 2021.
December of last year was also a record with 851,000 people. The uncertainty about the economic future of Argentina is at the end of the year, and it is repeated again added to the expectation of devaluation that drives the purchase of dollars as a refuge against inflation.
sightseeing
It is also a key month for tourism. For those who managed to purchase tickets, packages and accommodations abroad prior to the new resolution of the Central Bank, December will be one of the months of demand for those who require dollars to travel. In October, 762,000 Argentines (15,000 more than in the previous month) bought US $ 343 million in the official market, of which US $ 173 million were for card expenses for consumption with non-resident providers (16%).
A fact that draws attention among those revealed by the BCRA is that the item “Travel, tickets and other card payments” meant sales in the services segment for US $ 265 million, 85% more than in the same month of 2020. Therefore, the Central made the decision to restrict the purchase of tickets with cards because it expected a greater demand for dollars that would put reservations in a more complicated situation.
Balance closing
The companies carry out a double operation this month: on the one hand, those that seek to send dollars to their headquarters and, at the same time, seek to obtain pesos to face the payments of the bonuses and / or Christmas bonuses of their workers. In this sense, it is the sending of dollars abroad that will generate greater pressure on prices.
Importers
The central bank (BCRA) made access to the foreign exchange market more flexible last Thursday capital goods importers already banks, with the idea of giving more fluidity to the requests for dollars to motorize production and, at the same time, not affect the balance of financial entities. In this sense, the board of the monetary authority reduced the conditions of automatic access to the exchange market for imports of capital goods with advance payments of up to 270 days, for all goods with values of up to 1 million dollars. This greater demand for dollars is what the economic cabinet seeks to guarantee since it is what allows the growth of the economy. Paradoxically, as the economy grows, it demands more dollars.
Bookings
After registering positive balances until August, with the legislative elections, a consecutive downward trend in reserves began to be seen. In the last three months, gross reserves fell by $ 4 billion. September was the most difficult month with a fall of US $ 3.269 million.
Currencies were also affected by the agency’s intervention in the official exchange market and in the financial market. To prevent the exchange gap from widening, the Central allocated US $ 2.7 billion in both. The uncertainty in which the markets are after the announcement of the “multi-year” plan without further definitions, added to the expectation that an agreement with the IMF will be signed before the dollars run out, add up to one more front than the month of December must define hastily.
Only yesterday, the Country Risk, the main indicator of the expectations of the markets in Argentina, returned to a historical record, approaching 1,900 basis points, which directly encourages investors to acquire dollars as a reserve of value.
The alternatives to loosen tensions (expanding the supply) will be the wheat harvest that begins in December, which is expected to be US $ 400 million, the agreement with the Monetary Fund for the end of December – in which it is intended to include the expiration date. December – in addition to the arrival of a new disbursement of Special Drawing Rights (SDRs) and money from multilateral organizations. In addition, the possibility begins to grow that the BCRA will gradually accelerate the devaluation by adjusting the official exchange rate to the rhythm of inflation.
Source From: Ambito
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