The government's plan to calm the dollar: strengthen reservations with the help of China, will it reach?

The Blue dollar is unbeatable, and again touched a new record by closing on Wednesday, January 26 at $ 221, which represents an increase of $ 1.50 cents, and accumulates in the rise of $ 15, mainly driven by doubts about theclosure of an agreement with the IMF.That restlessness is what also scale to the parallel financial dollars that are negotiated in the stock market, the MEP or stock market, and the one counted with liquidation (CCL), the latter is the route that companies are used to take out the currencies of the country.

Thus, the gap touched the highest level since November 2020 when it was 111% between the Blue and the wholesale dollar that ended at $ 104.70, that is, a daily increase of 8 cents, and enlarged 100.06% inRelationship to the Retail Officer who missed $ 110.14 according to the Central Bank average.

After without selling without selling, the Central Bank had to disburse US $ 50 million to supply the demand in the Mulc.

The operator Gustavo Quintana de PR changes pointed out that "given the insufficiency of the genuine supply, the monetary authority saw its sequence of positive results interrupted, writing down a loss of currencies that reduces in the same proportion the positive accumulated of the month".

"January net purchases are now reduced by just over US $ 60 million, less than half of what was achieved in January 2021, when a virtuous cycle that remained until September of that year began," said the operatorWho also argued that "the correction of the exchange rate is maintained this week below the rise of the previous week, attenuating for now the most accelerated rhythm of sliding seen in the first part of the month".

The stock of gross reserves was at US $ 38.872 million.

The greatest uncertainty about the agreement with the IMF and doubts about whether the government will pay the maturities with the international body for about US $.100 million in total that must be canceled on Friday, January 28 and February 1, also steep the CCL operated with bonus A30, rose 3.3% to $ 229.12, while the price reached $ 231 if measured if measuredwith other assets such as the GD30 and Cedears bonus, so the gap amounts to 118% and 120%, respectively.

The change, the MEP or bag closed at $ 216.85, showing a 0.9% drop.

Dollar: Escalada factors

The financial analyst Christian Buteer told iprofesional that "I did not expect the truth that a jump from the dollar so fast, but will accelerate faster in February when the demand for money falls much stronger, but there was an event that was on January 6When the Minister of Economy, Martín Guzmán, who spoke (before governors) of the problems in reaching an agreement with the IMF that generated such bad expectations in such a short time to need the agreement yes or yes because we will not have the way to payThe maturities of March, which generated this anticipated run that we see these days ".

"From that day there was a strong reaction of all parallel dollars, it jumped $ 20 in 20 days.The expectations created by the minister were bad, "he emphasized.

He said that this adds other factors such as the effect of "the brutal monetary broadcast of the last quarter of 2021", and the seasonal fall of the demand for money ".

For Buteler, "it has much more weight the financial dollars than the Blue, because they have a much larger market, I look more at those".

In this context, the analyst warned that "the dollars never have a roof, and it depends a lot on what will happen to the IMF, if the expiration is not paid the dollar would shoot much more like the gap".

"The roof is put by the government with its measures, if they grab for the wrong side, it has no roof," he predicted.

In turn, he considered that a measure "that can help calm financial dollars is that the Treasury rises the rates in tenders, even stronger than the rise of rates of the Central Bank, to capture more weights, and need to emit less".

But he insisted that "the fundamental signal to see if the voracity over alternative dollars calms is the agreement with the IMF, and that it is interpreted as credible and fulfilled".

In tune, the analyst Gustavo Ber said that "the attention" of the market "focuses on the daily balance of interventions (of the BCRA) following the current position of liquid net reserves, hence the expectation - and urgency - that awakensAn agreement with the IMF in the short term ".

"The restlessness of the operators continues to be reflected in the bullish march of financial and free dollars, with a high gap whose evolution will be hostage of understanding with the body in search of stabilizing the dynamics of" more pesos, less dollars "in force"

Dollar and reservations: Is the swap expanded with China?

In the midst of the exchange day of exchange, the Bloomberg agency reported that the Argentine government asked China to an extension of more than US $ 3.000 million of their bilateral currency swap in yuan to strengthen their reserves against great maturities of the IMF that are approaching.

As indicated, the Government seeks China to expand the exchange of 130.000 million yuan in another 20.000 million yuan (about US $ 3.000 million) additional, and added that "Argentina has already requested the increase and the issue will be discussed next week in Beijing with the Chinese president, Xi Jinping, when President Alberto Fernández travels there for the Winter Olympic Games".

Iprofesional consulted on this issue both in the Central Bank and in the Ministry of Economy but the information was not confirmed.

Instead, a market operator who usually has contact with authorities told iprofesional that "a rumor that sounds strong is that they would expand the coin swap at US $ 3.000 million but they were going to activate it, that is, it ends up becoming a loan and leaving it $ 3.000 million more reservations available to the BCRA for this period where net reserves "are weaker".

Will that measure help calm parallel dollars?

Sebastián Menescaldi, director of Eco Go, stated that if the swap was activated at US $3.000 million "serves to have triple the net reserves you have today, will go from US $1.500 million at $ 4.500 million"

"I would pemit to continue until March with positive net reserves, it could generate more confidence," said the economist who said that "China will also ask you to be closing the agreement with the IMF, but I think it is feasible that they accept to activate it above all if it is Short-term".

Menescaldi estimated that "the Swap with China is approximately 53% of gross reserves (US $ 20.500 million)".

On the other hand, Juan Pablo Albornoz, an Ecolatina economist, said on Twitter that if it is an extension of the swap, "the increase, if it occurs, it would be just over US $ 3.100 million an amount very similar to maturities with the IMF in February and March (US $ 3.186 million) "

"The swap did not serve to anchor expectations and no estimate contemplates it as net reserves.As much as this increase (if it happens) it would swell the gross reserves, would not modify the critical situation of current net reserves, "he said.

In a daylog with iprofesional, he said that "the SWAP will strengthen gross reserves and is a resource that could be used by last instance by activating the SWAP and then paying interest".

"However, when analyzing net and liquid reserves, the swap is not part of them (it is excluded as the embedded deposits and other liabilities such as the repo with the Basel Bank).Considering that today the question is how the Central Bank will genuinely recompose its firepower, the swap would not bring relief in that regard, "he said.

Nor does he believe that he helps to reassure parallel dollars, and "does not solve the underlying problem that consists of the debt with the IMF under the current calendar is impossible to comply and must be renegotiated".

In the same look, Javier Timerman, a partner of ADCAP told iprofesional that an expansion of the swap at US $ 3.100 million "from the point of view of reserves should not have any impact because the whole market is looking at the net".

"Taking into account that this occurs in the context of an advertisement of a very important Chinese investment plan in Argentina, it can be relevant if it comes with any novelty of how and how much of the SWAP could be activated if necessary.What can happen is that China agrees to expand it as part of an agreement with the IMF, "he explained.

Timerman said it would be "a kind of bridge as it has been done in the past with the Basel Bank that allowed to resolve defaults with the IMF until reaching an agreement".

For Buteler, the measure would serve "to show that a better balance of the BCRA in terms of reservations, but in practice it is not easy to use the swap, so I do not see that it is very useful and that will make the CCL go downor the MEP ".

For Fernando Baer, a senior economist of Quantum Finance, that eventual expansion "is to scratch the pot, without going to the matter of the matter, it does not change much".

"China gave indications that Argentina wants to close with the IMF to disburse funds for different projects.It seems difficult for me to advance if there is no agreement with the IMF.Anyway, if achieved, we are talking about half a month of imports, it does not solve the problem of lack of trust and lack of dollars, "he said.

For his part, economist Fernando Marull, who runs Fmyya, said that "the Swap with China today is US $20.500 million, they are yuan that the BCRA counts in gross reserves "and calculated that 2 with the appreciation of Yuan against the dollar, this asset rose in US $ 1.500 million in the last year ".

"They say they would ask for other US $ 3.000 million, they are adornment and can help avoid dollars to import from China, "he said, although" I see unlikely "that China accepts without an agreement with the IMF.

Consensus grows: More experts foresee a devaluation in the style of 2014

In the hypothetical case that instead of an extension, the swap at US $ 3 will be activated.000 million, anticipate that "a bit if" would help calm parallel dollars, although he added that "without IMF agreement everything is in vain".