Futures, fees and lace: the official strategy to contain the dollar before legislative in the province

In this context, the BCRA And the Ministry of Economy deployed three Key tools to sustain the value of the dollar Below the band of the band without compromising reservations: intervention in futures, monetary hardening, and absorption of pesos via lace and debt tenders. But in the last hours the presumption grew in the market that, in addition, the treasure began selling dollars directly.

1. The BCRA and its intervention in the dollar futures market

The Central Bank intensified its presence in the dollar futures market to anchor expectations and avoid abrupt jump in the price. The volume operated climbed to U $ 2,500 million in the weeka level that triples the usual movement in that market.

The open interest reached US $ 7,950 millionthe maximum of the Milei era and comparable with the previous electoral of 2023. According to estimates of operators, the selling position of the central round already U $ 6,000 millionwell above US $ 3,800 million officially informed weeks ago. It is worth remembering that The government to intervene in this market is at $ 9,000 million.

The strategy showed partial success: He managed to maintain the exchange rate below $ 1,330 and moderate the dollar implicit to December near the ceiling of the exchange band for that time. Being operations that are settled in pesos, they do not compromise reserves and allow the BCRA to “anchor” expectations. However, the level of intervention and the high volume of sales in future alerts: They could accentuate volatility and erode investor confidence.

2. Higher real rates of recent years

In parallel, the monetary scheme harden. The treasure managed to renew maturities and validated rates of 4.3% monthly in LECAPSwell above 2.5/2.6% with which they financed in the first months after the departure of the stocks. In addition, he issued titles tied to the tamar rate (today above 60% TNA) $ 4.6 billionwith strong demand for banks, which allowed to stretch deadlines at 100 days and consolidate reference instruments.

The message is clear: Raise the rates again so that the local currency debt can be refinant and, at the same time, take weights from the economy and stretch the calendar of maturities of the instruments offered by the Treasury.

This “monetary squeeze” accompanies the exchange strategy, since higher rates help sustain weight against the typical electoral campaign dollarization. In this way, the instruments in local currency look attractive and purchase price, although it will be the decision of the investor to tied to the risk “pesos” that contracts greater volatility. For example, the CER bonds were highly demanded during the week, given the attractive yields greater than 30% plus inflation.

In summary, the rise of rates means, by definition, a higher cost of money, something that for the government has a “transitory” character and could be moderated after electoral results, if they are favorable to the ruling party.

3. Histle to the banks: lace at the highest level in 32 years

The Third leg of the official strategy It was focused on “Surround the banks”in tune with monetary hardening. The arranged lace that climbed up to 53% – the highest level since 1993-, and resulted in a Strong induced demand for treasure titles In the last tender, before entities with few alternatives to handle its liquidity.

According to the last GMA report, the monetary authority withdrew $ 3.2 billion through this mechanism carrying the monetary aggregates, m2 and m3 private, to historical minimums: 7.9% and 13.4% of GDPrespectively. This contraction, which contradicts the initial strategy of the government, hits credit and, therefore, to economic activity and bank profitability.

Alarm sign at the City: Did the treasure sell dollars?

In recent days, a report by consultant 1816 reflected a drop in treasure dollar deposits, at the same time that an increase in placements in pesos within the BCRA was verified. According to these calculations, the volume of operations was around U $ 350 million between him 11 and August 27.

Beyond that it cannot be interpreted as a defined strategy, the fact represents a sign of the tension that economic policy is going through in the midst of exchange volatility. An eventual sale of dollars, in a scenario in which the Central Bank does not accumulate currencies, could compromise confidence in the official ability to meet the next debt maturities. However, it cannot be ruled out, again, that it could be something “transitory” and that after the elections, the treasure buy dollars again. However, two months look a very long period to maintain this dynamic.

In this context, the political climate does not help and add uncertainty. The government confidence index fell to 42.4%in August, the lowest level of Milei management, with a collapse marked in GBA, of 23%. The question falls to whether these measures of the BCRA and the Treasury will reach to contain the dollar, in the last week prior to the elections in PBA. For now, the combo of Futures, rates and lace It allows the government to gain time.