PORFOLIO PERSONAL INVERSIONES – With comments from officials contradicting each other, the exchange front looks bleaker than ever. Before, even if it was, there was the hope that with the debt agreement the exchange gap would deflate. But that possibility disappeared and the pressure returned, despite the arrangement with the creditors.
In recent days, the price of the dollar has slipped back onto the government’s agenda. With comments from officials contradicting each other, the exchange front looks bleaker than ever. Before, even if it was, there was the hope that with the debt agreement the exchange gap would deflate. That possibility disappeared and the pressure returned, despite the arrangement with the creditors.
President Fernández admitted that he is considering limiting the quota of US$ 200. Later, Minister Guzmán came out to clarify that this limitation is not in the pipeline. In the midst of these twists and turns are the meager international reserves.
It is worrying that with a trade surplus in the last 12 months of US $ 18,433 million (US $ 8,077 million in 2020) and with the tourism deficit practically at zero due to the pandemic, the BCRA has to sell reserves practically every day to maintain the rate exchange. After having been able to buy US $ 672 million in June, it sold US $ 1,206 million in July (US $ 568 million) and so far in August (US $ 638 million).
Furthermore, let us bear in mind that the positive trade balance is caused by a collapse in imports, which in June fell 20.8% compared to June 2019, while exports fell to a lesser extent (-8.6% yoy).
Returning to International Reserves, a distinction must be made between net and gross reserves. The former are those that are available to be used to intervene in the foreign exchange market, while the latter include assets such as bank reserves that are not available to the BCRA to keep the dollar at a certain value. Net reserves total around $ 8 billion, leaving little firepower to maintain the official exchange rate. Furthermore, as we said before, the BCRA continues to sell reserves, making the current situation unsustainable.
For these reasons, the government focuses on small savers who buy their US $ 200 per month every month. Month by month, more and more people make of those dollars. In June, the total number of people was 3.3 million and it is estimated that in July, that number will reach 4 million. Worse still, are the forecasts for August, which with the data for the first fortnight do not rule out that the number is even higher. If approximately 4 million people buy the US $ 200 per month, they will spend US $ 800 million in dollar savings.
Now, the problem with all this is the savers?
For the President, small savers are a problem for the Argentine economy. However, the culprit is the absence of an economic plan that does not generate incentives for the Argentine to save in pesos. That the Minister of Economy recommends us to save in pesos does not work, but they have to generate confidence that everything necessary will be done to take care of the value of the peso. To do this, it is crucial that there are signs that the State is going to have the public accounts in order, so that the assistance of the BCRA to the treasury is not necessary and that little by little, the peso is demanded again to reserve value.
Without serious structural reforms that seek to create an environment conducive to sustained economic growth over time, where the sole objective of the BCRA is the stability of the peso, Argentines will continue to place their savings in dollars for the simple fact that it is the best way to save.
Nobody denies that the best thing would be for Argentines to invest their money in the capital market so that private companies can get more and better financing. However, the giant state that we have absorbs a large part of the resources that remain in the financial system to finance infinite deficits.