It could be said that the government logic Regarding what the Central Bank began to do since this Monday by intervening in the dollar market Contado con Liquidación is buy pesos using American bills in order to close all the channels through which currency can be issuedlower inflation and the result is a drop in the exchange rate and the gap with the official rate. In theory, everything can be closed.
But for most from market analysts The reality is different, and in fact, the government rather than aspiring to dry up the peso market, He is only selling dollars on the market to lower the price.
Based on this, the former Argentine representative to the International Monetary Fund (IMF), Hector Torres raised certain objections to the heart of that reasoning.Speaking to Ámbito from Geneva, Torres considered that “The scarcity or abundance of pesos is only one element, not necessarily the most important, of the market value of the dollar.”
In this regard, he stated that “a very important factor, probably stillMore importantly, there is confidence in the country’s ability to meet its deadlines. of foreign currency debt.”
“The BCRA can use reserves to ‘pressure the market’. But one thing is intervene to moderate incidents of volatility and another is to intervene in a single direction to sustain a price,” he warned.
Specifically, in the first two days of “testing” the markets, the government managed to get the different free dollar quotes that had climbed to values of $1,500 to drop to between $1,350 and $1,400, but at the cost of an increase in country risk.”
For some analysts this constitutes the “short blanket” dilemma. If the government sells dollars to lower the market price, this is interpreted as meaning that it will accumulate fewer reserves or that it will not be able to accumulate enough to pay the bonds in dollars and that is why they fell in price, bringing the risk to around 1,600 points.
Faced with this, the question is how foreign investors could position themselves. Torres suggests that “The big ones, at least, are very likely to start by looking for risk insurance at the country’s official risk insurance agency. from his residence.” The former official mentions, among others, Hermes, Cofase and Sace.
“Today our The risk premium is the highest (according to the OECD Country Risk Classification ranking) similar to that of Afghanistan,” Torres added.
The economist pointed out that “in order for this risk premium to fall, at least for agencies in OECD countries, reserves will be necessary.” “Having a new program with the IMF would help a lot,” he clarified.
“I don’t think the shortage of pesos will awaken the confidence of potential investors,” Torres added.
In this regard, the economist Carlos Melconian considered that “in reality what they want is to reduce the gap and the parallel” and that the idea put forward by the government to close the emission tap is “an excuse, at least on the first and second day, to threaten.”
In radio statements, Melconian said that “They found the rule of selling what is bought and with that sucking pesos”. “That is the theoretical model, but In reality you don’t want to suck pesos, you want to reduce the gap “because it got away from you,” he exclaimed.
He also questioned the way the economic team communicated the decision through social media. “Within this, this story appeared that there are 2 billion dollars to intervene And then the question is, isn’t it what they bought that they came from? And where do they get these 2 billion dollars that they say they have according to a tweet?
The analyst concluded that “Here what they want is to sell 2 billion dollars to make the punishment thunder”
Also the economist Roberto Cachanosky He warned that in order to carry out what was announced over the weekend “They have to sell dollars that do not belong to them in order to operate in this market.”
“The RCentral Bank net reserves are negative. The problem they have is that in order to do that they will have to have dollars from exports and exporters do not want to liquidate because this exchange rate does not suit them,” said Cachanosky.
Source: Ambito
