The Central Bank faces a market that no longer responds to official announcements. Negotiation with the IMF fails to stop preventive dollarization, while exporters retain settlements and importers accelerate coverage. Volatility will continue to mark the rhythm in the coming weeks.
He Central Bank (BCRA) Accumulate ten consecutive net sales days in the change market. Only last Friday came from US $ 192 million, and since March 14 the negative balance amounts to $ 1,640 million. This deterioration of the exchange position reflects a change in market expectations, which reversed the buying trend that predominated until two weeks ago and has turned the BCRA into a net seller.
Uncertainty about the continuity of government exchange policy has been a key factor in this dynamic. Within the framework of negotiations for a new agreement with the International Monetary Fund (IMF), the Administration has suggested that could modify your exchange strategyone of the main anchors of its economic program since December 2023. Until now, the scheme consisted of a Crawling PEG that initially set at 2% monthly, then reduced to 1% and was projected to converge to 0% to the extent that inflation descended and the conditions for eventual elimination of the exchange rate.
However, The possibility of a change in the rules of the game generated a wave of coverage in the market. Importers who had achieved financing to defer payments and take advantage of attractive interest rates in pesos began to close those operations. In turn, exporters chose to finance more convenient rates than in local currency, encouraging Carry Trade strategies that enhanced the currency flow towards the BCRA. But in the current scenario of uncertainty, those same exporters have reduced the rhythm of currency liquidation waiting for a better exchange rate.
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The combination of a lower supply of dollars by exporters and greater demand due to the closure of exchange exhibitions generated an imbalance that the BCRA must have compensated with daily sales. With negative net reserves around AU $ s11,000 million, the current level of sale – between US $ 100 YU $ 1550 million per day – is not sustainable in the long term. Every dollar that sells the BCRA is a dollar that does not have, which reinforces the perception of fragility of the exchange scheme.
To try to change expectations, the Government and the IMF communicated the figure of the agreement in negotiation: US $20,000 million. However, this announcement failed to reverse the trend in the market. The lack of clarity about whether these are additional funds to the maturities of the next four years and the disbursement modality generated more doubts than certainties. Finally, it was the IMF who clarified that it is the total program and that it will be disbursed in sections, following its usual practice. The initial confusion, far from calming the spirits, reinforced the uncertainty about the government’s ability to manage the exchange crisis.
The deterioration of reserves also raises additional risks. Although the growth of dollars in the private sector was notable in 2024 – implemented by laundering -, from that moment on, a drip of departure is observed. Foreign currency deposits went from US $ 34.6 billion at the close of the AU $ S29.5 billion laundering today. An acceleration of this dynamic could further complicate the situation of the BCRA and affect financial stability.
Despite the current pretrial dollarization process, the delay in the liquidation of currencies by exporters is transitory. The need to fulfill contracts and the incentive for retention reduction in force until June 30 suggest that, at some point, those dollars will enter the market. In the same way, the ability to pay importers also has a limit, either by the nature of their commitments or the availability of weights.
However, The great unknown remains if the BCRA has enough dollars to sustain the current scheme until that moment. Even in an optimistic scenario, in which the IMF disburse between US $ 6,000 YU $ 10,000 million in a first section, the funds will not arrive before three weeks. In this context, volatility will remain high and uncertainty will continue to dominate the financial scene in the short term.
Economist
Source: Ambito
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