The Central Bank of the Argentine Republic (BCRA) had to sell USD 27 million today at the end of the week, so international reserves ended the day at USD 29,297 million.
Was very few wheels since the change of government in December when the BCRA ended up being a seller: it was also a seller on May 27 (USD 11 million), April 29 (USD 29 million), March 19 (USD 73 million), February (USD 142 million) and January 31 (USD 10 million).
Financial dollars, meanwhile, operated without major shocks and remained at $1,306 for cash with settlement and $1,282 for the stock market dollar. The informal dollar, meanwhile, recovered the $15 it had lost yesterday and returned to trading at $1,265 at closing time.
“The seasonality of the harvest for this time of year does not translate into the rate of reserve accumulation. The BCRA bought reserves at a rate of USD 115 million per day in May, even below the amounts purchased in March and April (USD 152 M and USD 167 M, respectively). This is a dynamic that did not change in the first days of June, which averaged purchases of USD 29 million per day, very low for these dates. This responds to the combined effect of greater access to the MULC for importers, since the entry schedule proposed in December 2023 had a maximum delay of 120 days and is no longer having effect; and a certain delay in liquidating the harvest, which could jeopardize the government’s reserve accumulation plans,” explained the consulting firm LCG.
Moving forward, the panorama begins to lose its brightness. The reserve accumulation process is slower than expected. “To the extent that this dynamic is sustained, renewed tensions may be experienced in the exchange market, especially if the crawl 2% on the official dollar”, analyzed from LCG.
It must be taken into account that, in the second half of the year, coinciding with a lower availability of reserves due to the harvest, higher debt payments fall. There are USD 140 million net pending with the IMF, USD 2,700 million with private parties for payments from Globales and Bonares, USD 865 million for the first maturities of Bopreal and until the partial (or total) cancellation of the swap with China (about USD 4,900 million) .
“In this scenario, we understand that the Government will continue to face the trade off between completely opening the tap on imports in order to discipline prices and help the recovery of activity and continuing to leverage the stock of reserves to enable at some point a controlled exit from the stocks.” they explained.
After five consecutive rounds of decline, the Argentine assets got a break and recovered some of the ground lost during the week. Although it was not enough to reverse the rise in country risk that It started the week just above 1,300 basis points to close it around 1,600, the recovery during the day put a stop to a series of falls that was beginning to set off market alerts. In that sense, it calmed the debate about whether the accumulated decline of 9% in bonds listed on Wall Street, for example, was a simple correction after having risen more than 40% in the year or if what was happening was a cycle change. The answer is not yet clear but today’s improvement at least temporarily dispels the worst speculations.
However, during the week, debt securities listed abroad accumulated an average drop of 9% while the locals did so between 3% and 5%, contemplating average increases of 2% during today’s round.
