Buenos Aires — The shopping spree of reserves by of the central bank Argentinian it was interrupted in the last weeks and in the Government they already recognize that there are no deadlines to leave the stocks. After having added more than US$US$17.2 billion until the end of Mayamount that allowed him significantly reduce the red of your net reserveswhich inherited negative levels close to US$11.2 billion, the currency recomposition entered into a impasse that coincided with the overheating of the exchange gapwhich rose from 20% to 46% in the last 30 days.
He government of Javier Milei has just closed one of the best weeks of his first six months in office. Added to the approval of the Base Law and the fiscal package in the Senate was the lowest inflation data since January 2022, the agreement with China to renew all maturities of the June and July swap, for US$4.8 billion, and the approval of the disbursement of US$800 million by the board of the IMF.
The reverse side of that, however, was that The Central Bank (BCRA) closed the week with one of the largest daily foreign currency sales since the change in management. In the first 10 rounds of the month, in fact, the entity chaired by Santiago Bausili ended up being a net seller of foreign currency in the exchange market in four and barely accumulated net purchases of about US$130 million, according to official and preliminary data from the entity itself. energy paymentsspecialists agree, influenced that dynamic.
Why the purchase of BCRA reserves falls
At the beginning of this month and after the gas crisis that the country went through for days, Energía Argentina Sociedad Anónima (ENARSA), the Argentine state company in charge of the supply and distribution of natural gas, contracted seven Liquefied Natural Gas (LNG) vessels for guarantee internal supply during the winter.
Paid more than US$177 million, for which it spent, on average, US$12,101 per million BTU, US$2.1 more compared to the March and April tenders. This way, During the accumulated period of 2024, Enarsa awarded 28 LNG vessels for a total of US$618,633,300.
To this dynamic, some economists warn, a certain willingness of producers to retain their grains would have been added in the face of uncertainty that was generated around the approval of the Law Bases and the exchange gap shot up above 40%.
These warnings hold despite the fact that From the sector they denied delays in the settlement of currencies at the beginning of June. “There are no delays in the settlement of currencies,” CIARA-CEC stressed. in a statement in which he detailed that agriculture brought in more than US$9 billion in the first five months of 2024.
It represents a mild drop of 4% year-on-year. Although marginal, it is worth remembering that This decline occurs in the face of a year affected by a record drought for the last decades, which cut foreign exchange earnings from agriculture by more than US$20 billion.
The dynamics observed in the last 30 days did not help either. of deposits and loans in dollars. After growing strongly since December 10 and mid-May, Credit in foreign currency slowed its advance and reduced the supply of foreign currency to the official market of changes.
The arrival of Javier Milei at the Casa Rosada had generated a resounding change in expectations. Since his landing and until mid-May, the Deposits in dollars grew almost US$3.9 billion (27.6%)and for just a few hours They were above US$18,000 million, something that had not happened in Argentina since April 2020..
The loans in dollars showed an even greater evolution in terms of proportion. Until the end of May, they grew more than 78% (about US$2,824 million) until reaching at the end of May a recent new peak of US$6.44 billion, levels that have not been observed in the country since August 2020.
But Since then, credit in foreign currency showed a slowdown. The stock of deposits in dollars fell to US$17,673 million while loans fell in the margin to US$6,302 million.
The dynamics seen until mid-May impacted the Central’s ability to add reserves. In periods of confidence in which deposits and credit in dollars increase to the private sector, Exporters can liquidate those dollars from the loans in the exchange marketfacilitating the entity’s purchases to strengthen its reserves.
Sales forward and without deadlines to get out of the stocks
Going forward, the Government has already announced that the Central Bank will go from being a net buyer in the exchange market to a seller. On Wednesday, President Milei himself had revealed that the program with the IMF contemplated that US$2 billion would be lost in the third quarter due to seasonal issues.. He even noted that “we have room to lose US$3 billion”.
Given this panorama, and given the overachievement of the reserve accumulation goal observed so far, The Government committed to raising the accumulation goal for the second quarter of the year of US$9.2 billion to US$10.9 billion. For the third quarterthe new goal was US$8.7 billion (US$2.2 billion less)but was not modified the goal for the yearwhich remains at US$9.7 billion.
Through a joint statement from the Ministry of Economy and the BCRA, the economic team advanced this dynamic planned for the next quarter. He also recognized that although “considers advancing in the liberation of exchange controls and in greater exchange rate flexibility” he also added that will not make “commitments regarding specific dates or measures.”
Cumulative variation in international reservesStatement from the BCRA and the Ministry of Economy
