Payment to the IMF: the city calculates what the impact is on the BCRA reserves and how the net reserves are

He The Central Bank (BCRA) finally made the announced payment to the International Monetary Fund (IMF) on Tuesday for about US$780 million and, as expected, this had a negative impact on the International reserves of the Central Bank (BCRA)that fell from US$28,193 million to US$23,311 million this Tuesday, August 6. That, as far as the gross figures are concerned, but, of course, it also has an impact on the net figures, which are those calculated by the market and are the ones that are of most concern because define the firepower of the monetary regulatorHow do they stand after this step and what does the market expect?

There was much talk about the payment being “kicked” due to the delicate situation of the reserves, but the truth is that the cancellations of interest and surcharges cannot be postponed or accumulated at the end of the month, as is done with capital maturities. That is why this disbursement from Argentina to the IMF, which is the second to last of this 2024, “It was carried out in accordance with the guidelines of the international organizationwhich provides for a payment deadline at the beginning of the month,” as market sources pointed out to Ambit.

That deadline ended on Tuesday and that is why the disbursement was made on Tuesday. But what is also true is that This payment comes at a very fragile time for reserves and it hits the net assets that the BCRA has in its coffers, which analysts from different private consulting firms estimate to be in negative territory.

What level are net reserves at, according to the market?

For Eco Gofor example, are located in around negative US$3.995 million (according to the calculation used by the IMF) and in -US$6.482 million according to their own calculations. In this context, Sebastián Menescaldi, economist at the consulting firm“Reserves are a challenge going forward because the Government is having a hard time accumulating dollars and the BCRA has taken measures that imply the decumulation of foreign currency for the regulator: intervention, on the one hand, and, on the other, payment for imports.”

According to his estimates, between the two measures, they would be adding a greater demand of US$6,000 million and they expected to buy US$2,000 million in the second half, but he warns that, with these payments, “They would be losing US$4 billion by the end of the year“And the problem is that they don’t see a possibility of accumulation in this second half of the year.

For its part, Claudio Caprarulo, director of Analytica, indicates that the consulting firm’s net reserves are negative by around US$3.9 billion and reach negative US$5.9 billion if the Bopreales are discounted. “This occurs in a context in which The news is that reserves are falling and so is the exchange rate gap.when the logic is usually that they move in reverse,” says Caprarulo.

And explains that This is due to various causes, such as the fall in the issuance of money and the official policy of intervening in the parallel markets, but also to the expectations of the financial market and the belief that the Government’s monetary policy is not sustainable.“The uncertainty is then how long this strange dynamic can continue,” he warns.

As indicated by the Economist and director of CyT, Camilo Tiscornianet reserves calculations usually differ from one consultancy to another. “Usually, the swap with China, the dollar reserves and the deposit insurance are subtracted from the gross reserves. We also discount the maturities of the Bopreales and that gives us around US$5.6 billion in the negative“. If we also subtract the deposits that the Government has made in dollars in the BCRA to pay debt, it would go to around -US$7,000 million. The payment to the IMF this Tuesday, implies deducting some US$780 million from those figures, which would leave them even lower.

The future of the BCRA reserves, an unknown

In this sense, it is clear that Net reserves are at very low levels And, although this disbursement to the IMF is not a large amount and fits in with the funds that the organization had transferred to the country after the approval of the technical review of the first quarter, it comes at an inappropriate time and in which the future of the BCRA dollars is worrying.

And Menescaldi argues that “The doubt, going forward, is about what could happen with the reserves in the second half of the year.”Although the Government is confident that many dollars will come in through money laundering, it warns that it does not seem that this will be enough to make it to the end of the year with the dollars it really needs to safeguard the accumulation achieved in the first part of the administration.

“Other incentives, such as money laundering or RIGI, may appear during this period.but the BCRA runs the risk, with the current system and the unadjusted exchange rate, of going back to square one with the accumulation of dollars that was achieved by next year. It is unlikely that the dollars they need will come in,” warns the economist.