After two failed attempts, this time the central bank He received a strong demand from importers in the third auction of BOPREAL Series 1 -which seeks to organize the commercial debt-, in comparison with the first and second auction, in which it had obtained adhesions for US$60 million and US$57 million, respectively.
As officially announced, all of the offers were awarded, and the amount placed amounted to US$1,179 million, accumulating a total of VN u$s1,304 million, in the aggregate of the three tenders carried out so far.
“The increase in demand is beginning to reveal the value of the instrument as a computing mechanism for resolve the historic crisis of lack of international currency and address commercial debts for the import of goods and services accumulated as of December 12, 2023,” the monetary authority stated.
On December 26, 2023, bidding for the first batch of BOPREAL Series 1, which began operating in the secondary market on January 5. The BCRA authorities plan to carry out periodic tenders for the Series 1 twice a week until the end of January 2024. Meanwhile, Series 2 and 3 will be offered in the following months. This time, with some relief after the first two failed attempts.
BOPREAL: why didn’t it work in previous editions?
According to a report by Equilibra, the three reasons why BOPREAL did not have the expected success were the uncertainty regarding its value in the secondary market, the carry trade because the Central Bank maintains the crawling peg below inflation, but with positive rates in dollars and; a eventual exchange rate unification.
Recently, the Government made a key modification that gave the necessary “push” to these instruments. Through the AFIP together with the Ministry of Commerce, the mechanism that calculated the Financial Economic Capacity (CEF) of taxpayers was eliminated.
ANDThe CEF System constituted an enormous barrier when it came to importinganalyzing a large number of variables related to the financial situation of companies.
BOPREAL: why it worked and what can happen to the dollar
According to the economist Amilcar Collante in dialogue with Ambitthis third auction is a “good news”. “The Government was trying to give exit window for all stock of importers who were left with debt to foreign suppliers. “It is a good instrument that will have a price in the secondary market and allows you to pay taxes, it is quite novel or sophisticated.”
“You have to see thelisted on the secondary market, That is key and well, we are going to continue with the days seeing later I think that there were two factors that were not in the first tenders, which was the increase in the exchange gap more than the AFIP registry of importers”.
Refering to exchange gap and the decline in the dollar, Collante confirmed that the agreement with the IMF and that BOPREAL “is beginning to work” would alleviate exchange rate pressure. ““I think it clears up the uncertainty a little,” he concluded.
For his part, the economist Jorge Neyrocontributed: “The Central Bank denounced the fact that the gap expanded to levels of 40-45% and this had a strong impact on the demand for BOPREAL. Importers began to see the instrument in a better light and a sharp jump in awards was noted.” In the long term, he estimates, “this path will continue” and the US$5 billion ceiling is reached.
Finally, the analyst Fabio Rodriguez stated forcefully that “the gap did its job.” “The result was good, as a result of the improvement in the implicit exchange rate for the importer with the increase in the gap. In addition, the BCRA was adding operational improvements and some more sweeteners to overcome initial obstacles.”
However, he warned that there is still a lack of a “match” between supply and demand in the market “for a price and parity to be expressed that gives some certainty to the importer about the operation to be carried out.” For the moment, the Government won a first fight to decompress the cash with liquidation (CCL) and resolve the debt of a key sector.
Source: Ambito
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