These are the Lediv, instruments issued by the Central Bank tied to the official dollar. They brought in US$335 million on Wednesday alone.
The volume of investment in BCRA bills rose almost 40% due to exchange coverage
Ignacio Petunchi
The demand for exchange coverage grew again on the eve of the runoff, as happened before the general elections. Although at the beginning of the disassembly there was evidence of disarmament of certain instruments, the truth is that In the last two rounds, the appetite for instruments tied to the dollar grew.
From PPI, they confirmed this information. After having climbed between 2.3% and 5.1% directly this Wednesday, dollar futures extended their upward trend yesterday by climbing between 0.5% and 3.2%with the exception of the November contract which remains unchanged.
They also highlighted the increase in the volume of Lediv: “We continue to detect strong inflows to LEDIV, which is a dollar linked + 0% instrument offered by the Central Bank to exporters and certain importers, which has no price risk. Going to the numbers, “Inflows of US$335 million were received on Wednesday after receipts of US$606 million on Monday and US$206 million on Tuesday, totaling US$1,147 million so far this week.”.
The information was also verified by the broker Facimex Securities who explained that the stock of Lediv of the US$221 million recorded at the end of the first quarter of 2023, was added an additional US$856 M between November 9 and 14.
“The exposure of the public sector to the official exchange rate will be one of the main economic restrictions when it comes to correcting imbalances on the external front.in a context in which the real exchange rate has been at its lowest since December 2015,” they explained.
What other instruments were used as currency hedging
On the one hand, there are the “Exchange Rate Futures”, which are operated on a term basis and require depositing a guarantee, but the value is paid at the time of closing, so they can be operated without assigning liquidity. Contracts through December 2023 are trading at $691.
There are also the “Dollar linked instruments”which can be sovereign debt either corporate, that adjust for the value of the official dollar. The most representative is TV24, which expires in April 2024.
Another option is the ““Dual Instruments”, which are issued by the Treasury and pay the highest accumulated value between devaluation and inflation. The shorter tranche expires in February, April or June of next year.
The other alternative is to directly go to the “financial dollars (MEP or CCL)”, through the purchase of assets in pesos and their simultaneous sale against dollars, either in the local market or abroad. Yes
Source: Ambito
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