The foreign exchange market generally remains stable until the end of the year. However, it is noticeable that the price of the dollar with settlement (CCL), which is operated mainly by companies and professional investors and is used as a tool to withdraw foreign currencies from the country, does not give way and has a significant difference with the official exchange rate. It also makes an important difference in terms of MEP dollars, which is also operated on the stock exchange.
Beyond recent fluctuations, CCL has recently been operating in the $1,550 range, about $100 or 7% above the official exchange rate in the wholesale market. There is also some negotiation going on 4% above the MEP. In addition, the exchange rate is above the fluctuating range of the BCRA exchange rate system (although formally this mark applies only to the official exchange rate).
That is, although the Foreign exchange market has shown relative stability for several weeks, with very limited fluctuations in most references, The price of the CCL, the only one above the $1,500 mark, reflects that demand for dollars in this segment remains stablewhich represents a significant difference to the official exchange rate and the price of the MEP dollar.
Why is the CCL dollar under pressure?
The financial operator Nicholas Cappella emphasizes that the CCL dollar “remains in high demand” and the gap to the MEP dollar is even gradually increasing and is almost 4%. He estimates that this is explained by the “wide distribution” of corporate and provincial bond issuances abroad, which stimulates the demand for foreign currencies in the CCL market and would maintain the price with a great advantage over the rest of the references.
That means, according to Cappella, investors are demanding dollars in the CCL segment with the aim of sending them abroad and participating in tenders for foreign currency debt securities issued by local companies and provinces. According to their analysis, this demand would keep the dollar price above the rest in this market.
Analyst Martín Genero agrees that the placement records of Corporate and provincial debt abroad could explain greater demand in the cash dollar settlement market. In addition, a seasonal increase in dollar demand through this channel as a result of annual business closures, coupled with closures of accounting balances due to the proximity of the year-end, is not excluded.
It is worth remembering that in recent weeks, following the overwhelming election victory of Javier Milei October’s general election saw a series of corporate and provincial foreign currency debt problems amid greater post-election optimism: In November alone, total placements topped $4.2 billion, a record this administration, and the trend continued in December.
Lack of official intervention in the CCL dollar?
Unofficiallythe director of a reputable stock broker, holds these dollars “They are very involved” in markets where the central bank or treasury does not lose as many reserves. The interventions would occur mainly in the official market and the MEP, segments in which the public sector would lose net reserves but not gross reserves, while an intervention in the CCL would be reflected in both net reserves and gross reserves.
“When the central bank sells dollars on the official foreign exchange market so that private individuals buy them Home banking or through the MEP, those who receive the dollars cannot transfer them abroad. One way or another, these dollars remain in the local financial system and are then converted into loans for eligible companies or remain in bank accounts as savings and are then recorded as reserve requirements. Therefore, net reserves may decline, but not gross reserves,” he says.
The source claims that this is one of the factors that could be causing these gaps between quotes. That is, these are interventions with foreign exchange sales on the official market and in the MEP, while there are no interventions on the official market CCL Market because these dollars would flow abroad and no longer be part of the central bank’s reserves, which would be reflected in the gross reserves, the data for which are published daily.
For the financial analyst Gaston Lentini, This gap between the dollar counted in settlement and the other references is “strange” because a lot of capital usually comes into the country at the end of the year for tax reasons, which greatly reduces the difference between the quotations. Unlike in recent years, this did not happen this time and it is “surprising” because it reflects that currently “there are more people who want to send money abroad than people who want to bring money to Argentina,” which he sees as “not good news.”
About The Author
