New Round of the Government vs the banks for the dollar: the City goes to the crossing of an accusation of the Secretary of Finance

The “cold war” between him Government and the Banks Add one more chapter. This time was the Secretary of Finance of the Nation, Pablo Quirnowho from the small screen came out To accuse a banking entity of acting on the last to put pressure on the dollar this Monday. He used it as an argument to explain why the next day He announced that the treasure will begin to intervene with foreign currency sales To try to control the value of the price, a few days of the Buenos Aires legislative elections. What Quirno does not mention, and that was indicated hard from the market, is that this maneuver was the result of the limitations that the BCRA imposed on financial institutions last week.

Specifically, what happened was that Quirno assured, in an interview with the journalist Antonio Laje, who had identified “specific situations” on Monday when over two hours, “A Bank of Chinese origin” (in clear reference to the ICBC) with a close position au $30 million, “tried to lift the price of the dollar and did it, with a rise of $ 40, with a very small volume and that is because of the liquidity in the market.” Given these statements, several City operators went out to remind the official to Banking entities were not allowed to modify their position in foreign currency on the last business day of the month, just what happened on Friday, August 29.

“Little serious guys”

One of those who raised his voice to Quirno’s sayings was the economist Fernando Marullpartner of Fmyawho from his account in X wrote: “For regulatory changes on Thursday, banks on Friday could not modify their own dollar position. They had to do it since Monday. They are going on Monday, they do it and it is trying to go up. Little serious guys”. In fact, the banking entities had already left the government’s crossing on Friday, arguing that these measures complicated the exchange of the end of the month. But nothing prevented them from going to increase their position in foreign currency on the first business day of the following month.

What did the “Bank of Chinese origin say”

Scope He communicated with ICBC representativescurrently the only Bank of Chinese origin that operates in the country (it should be remembered that the HSBC was absorbed by Galicia). From this entity, They entrusted to this medium that “we are not going to go into details” bywhich is “a sensitive issue.” “What we can say is the following: We operate in the market many years ago, with suitability and respect for regulatory standards. We will continue to support and accompany the measures focused on the growth of the country, “they said publicly.

In parallel, other sources in the sector, they entrusted to this medium that “There is a lot of distrust” and that the link between the entities and the government cracked within the framework of the Fort Monetary to control the dollar. They ensure that it will be a relationship that will cost to rebuild.

But not only banks have a critical position, from the market there was another point that outlined Quirno, and that was strongly questioned: that the band scheme is still valid. In fact, this point is directly linked to the official signaling towards “the Chinese bank” that pressed the dollar in moments of illiquidity.

For the economist, Jorge Gabriel Barretoprecisely that the official said that “The treasure will actively participate to prevent periods of lack of liquidity, which are the ones that generate the greatest uncertainty,” literally describes the theoretical definition of a managed exchange rate scheme.

Official intervention in the Mulc: Chronicle of a scenario announced

Market sources noted that the Central Bank (BCRA), which acted “on account and order” of the Treasury, It would have sold more than US $ 100 million on Tuesday, the first with official intervention in the Mulc. And this Wednesday, with less volume operated on the wheel, the BCRA returned to participate in the market, at the request of the Treasury.

For its part, from Max Capital, They made the following calculation: if to August 29, the treasure had US $ 1,686 million in its BCRA account, This figure probably approaches today au $ 1,500 million. “Looking at yesterday’s operations, it could intervene for a few weeks, selling about US $ 100 million per day “they expressed.

The truth is that beyond the government’s announcement, For almost a week, it was already speculated that the fall due to “drip” of the currency stock that the Government has in the BCRA was due to an unstalled exchange intervention. “The announcement seems to confirm the treasure sales inference in the change market in August. Adding the fall of treasure dollar deposits in the BCRA for US $ 23 million on Friday -given that there were no payments planned to international organizations -, We estimate that August intervention was US $ 156 million“They explained from PPI.

“The treasure has sufficient fire power to sustain its interventions in the exchange market in the next few days. As of August 29, the deposits in foreign currency in the Central Bank amounted to Au $ 1,686 million, just below US $ 1,709 million registered the previous day. Besides, The Treasury could expand its ability to action acquiring currencies to the BCRA. In this sense, liquid reserves, counting Degs, are estimated at US $17,750 million last Friday“They expanded from PPI.