He Central Bank of the Argentine Republic (BCRA) bought about USD 11.4 billion in the cash market between the devaluation of December and the end of March, which represents a an amount almost identical to the USD 11.1 billion of accrued importsbut not paid, through the Single and Free Exchange Market (MULC) in the period.
In other words, in the first four months of the new Government of Javier Milei, BCRA purchases were leveraged by commercial debt accumulated by the private sector. However, in March, the agency’s purchases, of USD 2.9 billion, exceeded the increase in importers’ debt, of USD 1.7 billion, reflecting that there began to be “anything else”according to the financial consultancy 1816.
“There are still no complete statistics for April, but, as of the second fortnight, those who imported at the end of December could already access the MULC for the last 25% quota, which suggests that the commercial debt must not have grown. “Despite that, the BCRA bought USD 3.3 billion in all of April and the net purchases of what was settled by CIARA were USD 1.4 billion, the second largest amount in history for any month.”the firm indicated in a report.
“If it is not only due to the liquidation of the coarse harvest or due to import debt, why does the Central Bank continue to buy so many dollars? Our hypothesis is that it is due at least in part to the financing in dollars that local banks are giving to companies, which settle those dollars in the MULC. With the A3500 running at 2% per month and access to spot to pay off those obligations, borrowing in dollars is a reasonable alternative to finance working capital for net foreign currency exporting companies.”the specialists added.
Only between March and April, The local stock of loans in dollars increased USD 2,000 million and in March some USD 668 million entered the MULC from local net financing to the private sectorthe highest figure in all history.
“Unlike the increase in commercial external debt, which can be thought of as a measure to buy time until the seasonality of foreign trade begins to play in favor of the BCRA in the spot, the expansion of private credit in dollars should be considered as a factor more sustainable accumulation of reserves, as long as confidence in the macro and, therefore, in the financial system continues to grow”reported since 1816.
