In all cases, the biggest global threat is less economic activity, high interest rates, and inflation should subside, but not to pre-pandemic levels.
In the Argentine Central Bank it has benefited from the inflow of dollars from the IMF plus some investments from China that brought reserves to US$ 44,000 million. In the short term, the reserves are going to be rearranged in the area of US$ 40,000 million, due to the amortization of debt to the IMF, payment of interest on sovereign bonds and debt to importers.
There is no possibility of a new soybean dollar, which operates as an advance on exports, and the drought is a threat to currency liquidity. The Central Bank owes importers a whopping US$ 8,000 million, if it does not pay them when due in the next 180 dayswould fall into default.
The Government went out to renew the Treasury debts that it had in the first quarter of the year, it was a successful debt renewal, since 70% of what was intended was exchanged. Of said total, only 25% was placed by February 2024, the rest was a very short-term renewal that forces the Treasury to offer a new debt swap in the months of March and April.
The main problem in Argentina is the fiscal deficit, we are not taking any measure to drastically reduce it, as long as we have a fiscal deficit, and we do not have genuine financing from abroad, we will be obliged to finance it with the internal market. If it is not enough, it will have to be issued in some way. This is the real problem of our economy.
The The Central Bank has reserves for US$ 44,000 million, but monetary liabilities are very high, 2 out of 3 pesos that it has in liabilities are placed at an interest rate of 107.0% per yearand this causes liabilities to grow exponentially, which increases the possibility of an exchange adjustment during the year 2023.
If the Government makes it a policy to leave the official exchange rate at low levels, in order to delay the exchange rate and thus contain inflation, the unwanted consequence of this measure comes from two sides. In the first place, we will have fewer exports due to having an uncompetitive exchange rate.
Secondly, the exchange rate gap will be very high. Currently, the gap between the MEP dollar and the wholesale dollar is 85.0%, while the gap between the blue dollar and the wholesale dollar is 100%, the gap between the Qatari or tourist dollar and the wholesale dollar is 108.0%. We believe that the blue dollar will soon leave behind the Qatari dollar or tourist dollar.
In the market there are many who rant with those who make economic projections, in truth in all areas of life projections are made, which may or may not be fulfilled. Of course I constantly make projections, for example, we believed that the blue or Mep dollar at the end of the year would be at $400Something that did not happen.
The reason was a large income of dollars for two extraordinary events such as being a soybean dollar at $200 in September and another soybean dollar at $230 in Decemberwhich contributed to the coffers of the Central Bank a whopping US$11,623 million. What would have happened if this extraordinary measure had not been implemented, surely no one will think about this, but it happened.
The important thing is that in the future we will not have extraordinary income of dollars, the wheat harvest was a fiasco, some 12 million tons are estimated, when last year it was 24 million tons. In the case of soybeans,he 2021/22 campaign 43.3 million tons of soybeans were harvested, and for this harvest less than 35 million tons are expected. In corn, the 2021/23 campaign was 51 million tons, for this campaign 40 million tons are expected.
By the year 2023, the entry of dollars into the Central Bank’s coffers will be much lower than in 2022, on the other hand, the Government has already collected early withholdings and with the special soybean dollar it accelerated the entry of surplus merchandise from previous campaigns. In summary, the countryside has little to give, if a meat dollar were implemented it could contribute, with great luck, an additional US$ 2,000 million, when we are in the desert, a drop of water is a lot.
conclusions
Summer has arrived and the moment of truth, in the year 2023 there is no possibility of advancing income for the year 2024 because they belong to another administration. The drought will leave the Central Bank with fewer dollars and less revenue for the treasury. There is not a kind soul out there that will allow us to access constant hard dollars to genuinely increase reserves.
A swap can arrive from Brazil, but they are not liquid dollars, it is a clearinghouse of commerce, not to be confused. All roads continue to lead us to the dollar, now with a State with few possibilities of taking extraordinary measures and a first half of the year in which the demand for money falls notably.
Source: Ambito
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