Exchange rates traded on the stock exchange are around $1,330. The gap with the official rate remains above 40%.
The Financial dollars are on track to record their biggest weekly drop since Februaryas a result of the falls that occurred in the first hours after the new announcements by the Government on the beginning of interventions in the exchange market. However, in recent days halt their downward trend.
Thus, the MEP dollar bounces for the third consecutive day advancing 0.7% ($9.11) and reaching the $1,324.40. However, compared to last Friday records a 6.5% decline (-$91.82).
For its part, CCL down 0.3% daily ($-3.43) until the $1,328.91 and accumulates a weekly collapse of 6.9% (-$98.99). In this way, The gap with the official exchange rate went from 55% to a provisional 43.4% this round.
A reaction to the announcement of the intervention of the BCRA
Stock exchange exchange rates fell after officials from the Executive Branch announced that the Central Bank (BCRA) was going to start using the currencies it bought on the official market to intervene in the stock marketwith the aim of narrowing the gap.
However, the dynamics quickly found a floor due to the market distrust regarding the sustainability of the plan, given that it puts the accumulation of reserves at risk.
According to Nicholas Cappellafrom Investing in the Stock Market (IEB), on Thursday “There was sustained intervention by the BCRA, in a stable rangewith a percentage increase that could be justified by the fact that the real today depreciated by around 1.9%.”
The Government began a new stage of monetary/exchange rate policy
As an example, If the Central Bank buys $100 today, it issues $92,700 today.. What they want to do now is to remove those pesos from the market through the sale of CCL, which with current prices It would mean losing almost $70 of those $100.while the surplus would remain in the reserves.
According to the Ministry of Economy At the beginning of this week, the equivalent of $2.5 billion will be sold on the CCL that the monetary authority issued every time it received foreign currency from exports or other reasons. This would imply a outflow of reserves of approximately US$1.9 billion.
The market is concerned that the BCRA will stop accumulating reserves
The new strategy puts the objective of accumulating reserves in the background, something that worries the markets Considering that in the third quarter there are usually fewer dollars entering the country due to seasonal issues. In addition, the use of reserves to intervene in financial markets is something highly questioned by the International Monetary Fund (IMF)which could be a cause of tension in the face of the new agreement.
Source: Ambito
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