Dollar: this is the loop that seeks to disarm the Central Bank

The National Securities Commission (CNV) formalized the modification to the purchase and sale mechanism of denominated sovereign bonds and payable in dollars, through which MEP and CCL dollars are accessed, and the 15-day limitation on the sale of the obtained currencies, to avoid arbitration with other dollarized assets, through the published general resolution 962/23 today in the Official bulletin. In this context, an economist simply explained the loop trying to disarm the Central Bank to avoid volatility in financial markets.

the analyst Natalia Motyl He commented step by step through his Twitter what the MEP roll was like:

• You bought AL30 (bonus) in $. For example at $10,300
• You sold that bond in US$ the next day Ex: $22. That gives you $468 per u$s (MEP)
• With those u$s that you obtained you bought LEDES (S3Y3) at u$s0,200 (5xu$s1)
• Finally you sold it against weight at $99. That gives you $495. You made a difference of $27 (actually it was taking out the commissions a profit of 2% per day)

What changes now?

“Now you can’t do that because if you buy MEP you can’t sell it to buy another asset (eg LEDES). Those who buy MEP and CCL to dollarize their portfolio will be able to continue doing so. They only prohibit you from rolling. Now you can continue buying MEP to later sell it in the caves. In fact, the gain is 6% today. So that can increase the supply of dollars in the blue market in the coming days,” he explained on his Twitter account.

Dollar: the reasons for the new measure and how long it will be in force

In the document, it is made explicit that the Central Bank asked the CNV to implement measures to prevent the avoidance operations detected. They also point out that the aforementioned regulations, the CNV highlighted their extraordinary and transitory nature, until supervening events make its revision advisable and/or the causes that determined its adoption disappear.

It “establishes the need to adopt measures tending to consolidate and strengthen the macroeconomic order, as well as to implement policies that make it possible to provide greater exchange and financial certainty in the short and medium term; with the objective of achieving a greater availability of instruments to stabilize markets, absorbing possible monetary surpluses and, in particular, rearranging financial assets, especially those denominated in foreign currency, within the National Public Sector, with a view to a more prudent and efficient management of the same”.

“That, in the current prevailing economic context and within the framework of the recent evolution of the exchange market, it becomes necessary to reduce the volatility of financial variables and contain the impact of fluctuations in financial flows on the normal functioning of the economy as well as the impact of the operations implemented in the capital market through the simultaneous purchase and sale of negotiable securities,” they added.