The Ministry of Economic Affairs took part in the last half of the year two exchange windows in which he acted simultaneously: on the one hand he added dollars to pay off the debt in January, but on the other hand also sold to prevent a rise in the exchange rate from challenging the floating cap.
It is a double process that took place simultaneously. The net result was an increase in the hands of the Treasury because foreign exchange earnings were greater than the dollar amount that had to be allocated to the wholesale market to keep it in check.
This trend has been observed by various market analysts who mentioned that it has not been interrupted even once since January after the central bank announced it The floating cap is updated by inflation instead of the current monthly rate of 1%.
In numbers terms, a recent report from Portfolio Personal Inversiones (PPI) took stock of Palacio de Hacienda’s participation in the foreign exchange market so far in December and concluded that it was adding up according to the latest data available $408 million.
In entering this data, analysts point out that the economy went to the “Purchase” page. of dollars, triggered by the payment of Globales and Bonares bond coupons on January 9, for just over $4.2 billion. However, it also had to allocate some of these currencies to the wholesale market to meet demand.
According to PPI, the government had until Friday last week to sell the latest available data almost $170 million in various exchange rates where the wholesale exchange rate seemed more in demand.
The economy was therefore used to prevent the exchange rate from rising Challenge the ribbon ceiling. If something like that had happened, the central bank would have been the one to deal with the sales, but It is a signal that the government wants to avoid.
One question the PPI report answers is how the Treasury accumulated dollars while simultaneously having to spend money at the end of the year to meet high demand. And he mentions that there were two major operations “Block purchases” for $320 million and $220 million in the middle of the month.
In this way, acquisitions are carried out outside the open market, with the price agreed between the buyer and seller, so it has no influence on the generally negotiated price.
These types of operations can be arranged between the Finance Palace and a company (or province) that has placed Debt in dollars on the international market.
“Just when it looked like the Treasury buying was here to stay, the third week brought a new twist: Sales resurfaced “to curb volatility,” the report said.
December’s partial balance of just over $400 million in goods purchased contrasts with the months of greatest exchange rate volatility during the election process. The worst was October, with sales of almost $4 billion and strong pressure on the dollar.
Of these in total $2,060 million was provided by the Treasury Department, $1,885 million came from the US Treasury and a smaller portion ($46 million)from the central bank. On the contrary, the cheapest month was June ($1,230 million), in the middle of the bountiful harvest with reduced retentions.
The positive election result for the government seemed to be a before and after for the foreign exchange market. By October, record demand for insurance coverage, which the BCRA called “unprecedented,” slowed in November. Savers demanded around $1,110 million from the market, a drop of almost 80%.
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