On the second day after the legislative elections in the province of Buenos Aires, the central continues with its firm presence in the “simultaneous” of Byma. Now it does with a 40%rate. What does it mean?
After a day with strong impact in the financial assetsthe price of dollarand the interest ratesas a consequence of the electoral setback suffered by the government of Javier Milei In the province of Buenos Aires, some different movements are evidenced on Tuesday. While the economic team let out the exchange rate a bit and allowed him The Central Bank (BCRA) decided to lower 5 percentage points to the floor that sets for the interest rate through its intervention in the simultaneous wheel of Byma.
On Monday, The monetary authority aspired to 45%, while Tuesday does 40%. In parallel, the Wholesale dollarwhich is a reference in the market, rose on Monday $ 54 and closed to $ 1,409, that is, 4% more than last Friday and was only 4.3% of the band’s roof. This Tuesday advances above $ 1,420. It should be noted that the Treasury has about US $ 1 billion to intervene and that the BCRA could only do so when $ 1,470 is exceeded, as expressed by the agreement with the International Monetary Fund (IMF).
The million -dollar question is: the economic team “tests” a lower rate level and a higher dollar level? The economist Federico Machadoin dialogue with Scopebegins to answer it: “I think the government saw as a positive sign that yesterday, despite the electoral catastrophe, The gear market was balanced below the upper band, and tries to try if you can find a new balance with a high dollar and the slightly lower rates. It will depend on the reaction of the exchange rate if that attempt thrives or if the BCRA raises the corridor again. “
For its part, Andrés Reschini de F2 Financial Solutionsin dialogue with Scope He also considered that “The government is likely to be testing the market in this scenario of deepening uncertainty.” and stressed that they may analyze that “As in the previous wheel the official dollar did not reach the upper band without BCRA intervention, today decide to reduce the pressure on the rates, being that, in addition, a debt tender is approaching.”
The response to the floor that fixed the BCRA on Tuesday has its correlation in the market: The 1 -day bond operates 38% of TNA, cUndo came to rise to the beginning of the day in the strip of 44-45% (It should be remembered that prior to the disarmament of the Lefis, the 1-day bond rate operated in the 21-22% TNA area), in turn, This also impacts the Repo wheel that decreased to the rate to 49%, from the 65% TNA that operated on Monday.
The BCRA, the fees, the dollar and the risks of the play
However, A lower rate could complicate the demand for the currency North American This is explained by the economist Matpias Rajnerman To this medium: “When you look at the Lecaps curve, if you go today with $ 1,400 and peak, instead of buying a dollar, you buy a LECAP, and the letter that expires on October 17, leaves you above the roof of the exchange rate band. With which, which, which, with which, Lowering the rate can be a problem because it would generate Lecaps output. “
For Rajnerman, The fact that the performance of the shortest LECAPS is located above the roof of the official exchange band is a clear sign of the tensions facing the current schemebecause it reflects that the market does not believe the government that this roof will be sustained. That is why he believes that lowering the rate in this context could be risky, because the incentive to stay in pesos would be reduced.
Source: Ambito
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