Tuesday , February 18 2020
Home / argentina / PLAN M | REPORTS | Lacunza's debut: squeezed by the dollar, reserves and the latest information on deposits in dollars and pesos

PLAN M | REPORTS | Lacunza's debut: squeezed by the dollar, reserves and the latest information on deposits in dollars and pesos

In just four days last week (Monday through Thursday), the $ 1.555 million banks left. On Thursday, with the high interest rates they offer, the banks achieved greater renewal of deposits in pesos.

Lacunza's first test as finance minister. The central bank sold $ 112 million and managed to close the exchange rate below 55 pesos in the wholesale market.

Both Hernán Lacunza, the new finance minister, and the bank's manager, Guido Sandleris, left on the first working day of the week with the speech that the government today prioritizes stabilizing the exchange rate. Although they did not explain it, they indicated that they will target all guns so that the dollar, with little volatility, moves in a band around 60 pesos. However, they did not announce any concrete action, other than the central bank's willingness to use the instruments at their disposal (sale of reserves, interest and future dollar sales) to achieve this goal.

In its debut of Lacunza as head of the Treasury, the dollar remained stable, with a 0.5% decline in the wholesale market, closing at 54.75 pesos. But it wasn't easy. BCRA again sold reserves – it had not done so between Thursday and Friday: a total of $ 112 million fell. To this amount was added the $ 60 million a day that the IMF loan treasury sold.

The Merval index, which includes the most important measures in the local stock market, fell by 10.4%. While the "country risk" fell by 1.3% in the margin, even at unreasonable levels: 1853 points.

Today's prominent figures were the sudden fall of the "gross reserve" for the central bank, in more USD 3 016 million. Thus, they collect a reduction of 6,919 million since the Friday before the election STEP (see diagram).

This time, the fall in reserves – in addition to the central and national treasury – is mainly explained by the cancellation of "Repo" – a loan guaranteed by government bonds – with a selected banking club (HBSC and Citi, among others) for $ 2 615 million. "Repo" was an operation designed to increase BCRA's reserves: a loan guaranteed by government bonds. It was now canceled because the bonds that were under guarantee fell from the minimum value set in the agreement. Therefore, there was nothing left but to pay off the loan and repay the guarantee bonds. Similarly, the cancellation functioned as a cheap debt repurchase and the Treasury managed to reduce the debt by US $ 12,810 million.

Reserves closed at $ 59,390 million, the lowest level of the year. As I said, they are collecting a fall of 6,919 million from the Friday before STEP. And at $ 8.509 million in August.

In summary: three factors explain the acceleration in the fall of the reserve since Friday 9 August.

First cancellation of debt that cannot be renewed – except REPO, last week, for example, about 500 million Letes in dollars, short-term debt in the Treasury.

Second, the sale of central bank reserves (just over US $ 600 million since the run, plus sales of Treasury (US $ 60 million daily).

Third is the outflow of dollar deposits from banks, since half of these deposits are also reported as reserves.

In fact, BCRA reported deposit data until last Thursday. According to this information, dollar deposits accumulate in just four business days, between August 9 (the Friday before the step) and Thursday, August 15, a drop of US $ 1,555 million: US $ 1,321 million went from cash. savings in dollars and 234 million fixed terms in foreign currency. The ticket dollars that leave the system go to the safe or to the "mattress".

The only positive fact – with information from BCRA last Thursday – is that it seems that the high interest rates that banks began to offer savers – 60% in the first banks for retail institutions – stopped lending in pesos to the dollar and the renewal of fixed terms was recovered, after a very strong case the day after STEP. Last Thursday, the fixed terms in pesos increased by 6,000 million. Between Monday and Thursday, they still accumulate a fall of $ 29,000 million (Monday was $ 44,000 lower).

This is information that must be monitored daily.


Source link