After the announcement Tuesday of a halving of the rate of devaluation of the official exchange rate starting in February, andThe Central Bank decided this Thursday to maintainat least for now, unchanged monetary policy rate. This was confirmed to Scope official sources. The entity tries to avoid further pressure on the dollar financial.
The decision comes at a time when a good part of the market expected that the confirmation that the “crawling peg” (the monthly rhythm set by the exchange rate table for the official dollar) will drop from 2% to 1% starting in February will translate into a new rate cut administered by the BCRA.
However, in line with the signal given by the Ministry of Economy in the first debt tender in pesos of the year, the Central Bank seemed to show that it does not want to add a new factor of possible tension to the exchange gap. Both instances contribute to reinforcing the incentive for “carry trade”: a bet to try to prevent there from being more pesos that will put pressure against the dollar and that the purchase of foreign currency in the official market does not stop.
The truth is that the decision coincides with the expansion of BCRA intervention on financial dollarswhich became systematic in the last wheels and reflects the same concern. Based on the increase in the traded volumes of the AL30 and GD30 bonds (the most used to make MEP and CCL), Portfolio Personal Inversiones (PPI) estimated that In the last four days, it allocated some US$250 million of reserves to intervene on the exchange gap.
The reference rate remains at 32%
This Thursday, the BCRA held its usual board meeting weekly. There, a series of measures to encourage payments in dollars with debit cards within the country, within the framework of what the Government indicates as a step towards currency competition or endogenous dollarization. However, It did not make any decision to modify its reference rates.
Sources from the entity chaired by Santiago Bausili told Scope that, having not defined anything regarding the rate, “stays the same”. Today the monetary policy rate is located at 32% annual nominal (TNA) or 37.69% annual effective (TEA). In monthly terms, this implies an effective yield close to 2.7% (TEM).
The monetary policy rate is the one that remunerates the LEFIthe bills issued by the Treasury and managed by the BCRA (it sells and buys them from banks) that replaced passive repos since July 2024 as an instrument for regulating the liquidity of the economy. Indirectly, it influences what financial institutions pay for fixed terms. As of January 14 (latest data available), banks had a total of $12.47 trillion in LEFI in their portfolios.
The yield close to 2.7% monthly tied December inflation. The Government hopes that it will exceed the CPI of the first months of 2025. Although the economic team also looks at another relationship: the of interest rates in pesos (that of the BCRA and that of the Treasury debt) with the rate of devaluationwhich determines the profit margin in hard currency obtained by those who do “carry trade” (the strategy known as the financial bicycle) through the official market.
As he told Scope, the loss of the “crawling peg” It not only aims at the objective of resuming the path of slowing inflation. Also It serves to reinforce the incentive for the “carry trade”which had been partially reduced by the compression of rates in pesos. The thing is An eventual dismantling of these positions could put pressure on parallel dollars. Furthermore, the entry of players into the financial cycle (either via early export settlement or obtaining bank or stock market financing in foreign currency) is one of the key pieces that the Government uses so that the BCRA maintains the purchasing balance in the market. official.
Some operators understand that, in the debt tender in pesos this Wednesday, Economía sent a signal similar to that of the Central. The thing is that the Treasury, although it reduced the rate compared to the last auction in 2024, decided to pay a yield somewhat higher than that which was operated during that same day in the secondary market to issue double the weekly maturities and absorb pesos.
The objective seemed to be to build a cushion for the end of January, when the Economy will face maturities of almost $12 billion (this week they were less than $2 billion), which if not renewed could put pressure on the exchange gap at a time when Seasonality marks that the demand for money begins to decline.
Yet, It is still not clear if the BCRA plans to wait until the beginning of Februarywhen the deceleration of the devaluation rate to 1% monthly begins to be implemented, to then define a rate cut. And in the middle there remain two other board meetings, in which decisions could also eventually be made in this regard.
Dollar: BCRA expands intervention in the MEP and the CCL
For now, the decision to maintain them taken this Thursday coincides with the expanding its intervention on financial dollars deployed in recent days. At the city tables they observe that a significant increase in the trading volume of dollar bonds with which the MEP and CCL dollars are purchasedwhich shows that the BCRA’s participation was sustained.
In the capital market, the Central Bank sells a good part of the reserves it buys in the official exchange market. How much? Based on the latest monetary data published by the entity, PPI estimated that last Friday it intervened with around US$63 million.
Even without monetary data to clarify it, PPI pointed out that the volume operated in the GD30 and AL30 bonds continued in “atypically high” levels this week. If on Friday it was US$207 million (in the previous rounds it averaged US$72 million), this Monday it was US$190 million, on Tuesday it was US$247 million and on Wednesday it was US$181 million. “This makes us think that the intervention could have been similar to that on Friday,” the firm said in the daily report for its clients and estimated that Between the four wheels, the BCRA would have allocated some US$250 million.
The sustained intervention shows that the demand for dollars was reactivated and that financial prices could move upward even though they receive extra supply for the blend dollar (20% of exports are settled in the CCL), a way of indirect intervention, if it were not for the BCRA sales. It also shows that The economic team wants to prevent the gap from escaping (today at a low level, less than 15%) so that it does not fuel expectations of devaluation that could mark an abrupt closure of “carry trade” positions.
The economist Juan Manuel Telecheadirector of the Institute of Labor and Economy, considered that the systematic intervention of the BCRA in financial dollars reflects the tensions that exist on the external front. And he stated that, in that framework, The decision to lower the “crawling peg” to 1% is “a very bold move”.
In dialogue with ScopeTelechea said: “The financial dollar shows that the expectation is that its price will be higher and that’s why they are rushing to buy it. Added to this is the devaluation in Brazil, the very clear appreciation of our currency, the rise in interest rates in the United States that impacts capital outflows, the potential drought… There are a lot of signs that indicate that there is going to be pressure from that side. The normal thing in any economy is that this leads to a higher exchange rate and what is being done here is to appreciate it even more.” The doubt, he noted, is whether the Government will be able to continue piloting it with this scheme.
Source: Ambito
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