The Central Bank lowered the interest rate again and, protected by the dollar stocks, is experiencing a true debt liquidation party what savers pay and, especially, the little ones.
The monetary entity, hand in hand with Santiago Bausiliits president, decided on the fourth reduction in the reference interest rate of the economic policy of the management of Luis Caputo as minister, which now remains at 50% annually, equivalent to 4.2% monthly.
A first reading from the official side maintained that the reduction responded to a decrease in the cost of living that in April would have been around 9% and that the Government hopes to drop to 5% in May.
Another point of view is to say that the Central Bank lowers the rate to meet one of the objectives that the president Javier Milei which is to “liquefy” the Central debt as a necessary condition to be able to lift the exchange rate that limits the purchase of dollars at the official price to pay for imports or to save.
This validity of the stocks is one of the reasons that contributes decisively to explaining why a reduction in the interest rate that remains in the negative range in the face of inflation does not have a strong impact on free dollars.
A specific reason for this result is the validity of the blend dollar by which exporters settle 80% in the official dollar and 20% in cash with liqui, thus increasing the supply for free dollars: the cash with settlement at $1,127 and the blue at $1,035.
The reduction in the reference rate led to the fall in the interest rate fixed term deposits which the banks placed as of Thursday between 37% and 40% annually, around 3.3% monthly, which is below any inflation forecast for the coming weeks.
Bausili lowers the rate, protected by the exchange rate with regard to a jump in the dollar, to issue less interest due to the liabilities of the Central Bank, which has been a source of important monetary emission and which it seeks to eliminate.
The Central Bank thus reduces debt payment for your monetary liabilities which are around $34 billion and finances it by liquefying savers in pesos that, in a context like the current one, with stocks and with banks limiting the capture of adjustable deposits, are locked up or condemned to lose in real terms.
On the opposite side, the one with dollars, the chancellor Diana Mondino and the Secretary of Finance, Pablo Quirnothey traveled to China to negotiate an exit for US$ 5,000 million that Argentina must pay at the end of June for the use that the Central Bank of China authorized to former Minister Sergio Massa of the US$ 18,000 million of the swap that is in force from the times when Martín Redrado led the organization.
This swap resembles the possibility of a overdraft of a bank client, but with the particularity that every time it is used, Argentina must ask for permission and, in this case, the authorized overdraft expires in the middle of the year.
“Of course, like all other Argentine debts,” said the chancellor when asked by the journalist from Clarion María Laura Avignolo on whether the Government will pay the swap. Secretary Quirno added: “Yes. I mean”.
Paying the entire maturity would imply allocating 40% of the reserves that the Central Bank purchased and that remained after having paid more than US$ 2,000 to the IMF. The operators are focusing on the negotiations that may arise in the next 60 days with a Government that the President has reviled.
Former Argentine officials who negotiated with the Chinese government are inclined to think that the Asian country will not be especially harsh with the Milei Government, but everything related to the swap is surrounded by a halo of mystery and opacity which prevents making forecasts with any degree of certainty.
Both regarding the lowering of the interest rate, which savers end up paying the cost, and with the accumulation of dollars, the Central continues to advance with the protection of an exchange rate that, week after week, seems to be prolonging its validity despite Survey Intentions for mid-year.
