The outflow was mainly concentrated on Monday and Tuesday: between the two days, deposits in foreign currency fell by almost US $ 400 million. The next three wheels the drain dropped to around $ 50 million a day. There is no data yet for the first days of this week, but market sources assure that the normalization continued. “There are still withdrawals but on a much smaller scale,” trusted sources from a leading entity. In fact, on Tuesday the banks no longer asked the BCRA to send them green bills to supply a potential demand from their clients, unlike what had happened in the previous days. For example, on Monday they had asked him for $ 102 million.
In the City they explained that those requests to the BCRA to exchange banknotes for electronic money had to do with a precautionary decision by the banks to have green papers in all branches to give a quick response to the demand of savers that could be generated and clear up any fear of confiscation. The great territorial extension of the banking network explained a good part of the banknote order: more than half of the amount requested on Monday from the monetary authority corresponded to a provincial public bank.
They also pointed out that there were entities that requested physical cash from the Central to obtain the newest bills, known as “big face.” Is that, before the outflow of deposits last week, they had to appeal to the “small face” dollars (which were stopped printing in 1996, but have full legal force) and received reproaches from some customers. All in all, the BCRA supplies the banks to clear any kind of speculation.
In a context of economic fragility and 20 years after the 2001 crisis, the viralization of this type of fake news scares savers. But the truth is that both the Central and different voices of the market came out to clarify that the measure did not affect deposits and that the liquidity of the financial system is a record on a global scale. Argentina has hundreds of economic problems and risks; one of the few that it does not have is the lack of support from the so-called “argendollars”. In fact, in 2019, banks were able to cope with a tough run that took away more than a third of dollar deposits.
In your latest monetary report, The BCRA reported that throughout November, deposits in foreign currency fell by US $ 758 million (a fall of close to 5%) and ended the month at US $ 15,363 million. And clarified: “Bank liquidity in foreign currency was above 80% of deposits, remaining at record levels. This allowed financial institutions to face the withdrawal of deposits without inconvenience ”.
Along the same lines, a report from the consulting firm 1816 pointed out: “The liquidity in dollars of the financial system is at all-time highs. According to data at the close of this Tuesday (November 30), the banks had availabilities in dollars (cash in the entities themselves plus deposits in dollars in the BCRA) for the equivalent of 93.7% of total private deposits in foreign currency and 128% of private savings banks in foreign currency. There is neither currency mismatch nor deadline mismatch in the system ”.
This hyperliquidity is precisely an inheritance from that crisis. The measures taken by the BCRA after the collapse of convertibility to try to rebuild confidence in the financial system were maintained in successive governments. These regulations determined that the bulk of the dollars deposited in the entities must be embedded in the Central and that the little percentage that of them that is lent is granted exclusively to actors with the capacity to generate foreign currency, such as exporters. In 2001, a good part of the dollars of the savers was loaned to people or companies with income in pesos.