MEP dollar stops bearish streak and rebounds to almost $1,270, but heads for first monthly drop since March

The Financial dollars slow down their downward trend this Wednesday, July 31, and in particular the MEP rose for the first time in five days. Beyond this, the prices are on track to record their highest level in July. First monthly decline since March (MEP) and February (CCL)due to the effect of the intervention of the Central Bank (BCRA) to reduce the gap, the sale of corporate bonds and in the midst of the money laundering promoted by the Government.

The dollar MEP rises 98 cents (-0.1%) to $1,268.93which is why the spread with the official rate is at 36%, after touching 34%, the lowest level since May 30.

For its part, the dollar CCL It fell by about $1.05 (-0.1%) to $1,264, after hitting $1,250 at the start of the jackpot.

With these variations, in the accumulated month, the “stock market” shows a drop of $79 (-5.9%)while the “cash with liquidity” sinks $86 (-6.4%). Both exchange rates have not fallen in unison since February.

The causes of the recent fall of financial dollars

The losses intensified after the official announcement regarding the beginning of a new stage of monetary policy, which includes the Use of BCRA reserves to intervene in the CCL pricewith the dual objective of closing the gap and absorbing the $2.4 million that were issued through the purchase of foreign currency in the official market since April.

However, market sources say that the level of intervention was considerably reduced in the last few days, and that the decreases were more due to the sale of securities by companies, within the framework of the “blend” scheme which requires 20% of exports to be liquidated on the stock exchange.

On the other hand, the SBS Group maintained that “this dynamic of appreciation could be due to the effect of money laundering launched by the Government and approved in Congress weeks ago, and regulated a few days ago, so we will closely monitor the dynamics of alternative exchange rates over the coming days.”

“However, we remember that, despite this specific dynamic, The market’s eye on foreign exchange and external accounts will also continue to be on the reserve position. net of the BCRA, which continue to decline,” they added.

Additionally, in July the monetary authority eliminated restrictions on the operation of CCL and MEP for individuals who had received State aid during the pandemic or who have a subsidy for consumption of public services.

Bad outlook for reserves

This Tuesday, gross international reserves reached their lowest level since February, breaking through the $27 billion mark. Analysts estimate that net reserves are at a negative of US$6 billion.

The use of reserves to intervene in the CCL and the low projected exports due to seasonal issues predict a complicated third quarter in terms of foreign currency accumulation.