Why in full tension, BCRA relaxes the dollar for banks

The entity resolved to relax the measures that blocked access to the foreign exchange market for banks and importers. It arrived earlier than expected. Why?

At its usual board meeting every Thursday, the Central Bank of the Argentine Republic (BCRA) made more flexible the recent regulations that restricted access to the exchange market for banks and thus, as indicated by the regulator in a statement, “the Financial System will be able to return to a neutral exchange position of cash in foreign currency” and also relaxed the conditions of automatic access to that place for imports of capital goods.

In the case of the first measure, it should be remembered that the regulator had provided on November 4 that banking entities could not modify their liquidity in dollars (that is, all assets, liabilities, commitments and other instruments and operations through financial intermediation in dollars or linked to the evolution of the exchange rate in foreign currency) until the end of November with the objective of discourage speculations about possible jumps in the exchange rate, as reported after the decision by government sources.

Financial entities have a position in foreign currency below the regulatory limit and they stated in conversations with the BCRA that they were in a position to maintain that position, which would be at the same level of the monthly average of daily balances registered in October or the one in force as of today. issue of the standard, whichever is less.

The BCRA sought to relax the situation for importers, especially SMEs

As an economist with knowledge of the matter indicated to iProfessional, the aim was that the banks did not make any movement with these funds, which in part are reserve requirements that are within the Central and are accounted for within the entity’s reserves.

It happens that, as explained by the dissemination of that decision, the economist Christian Buteler, “Banks have as a rule the possibility of having a position in dollars that they can use as a hedge or position”. And the measure provided that the entities could not change the position in dollars that they had at that time until the end of the month to stop an eventual loss of foreign currency on that side.

Why was the measure advanced?

Consequently, The decision to lift the measure was expected to arrive at the end of November, but the BCRA decided to make it effective today. When asked why he came forward, Leonardo Svirsky, Sales and Trading at BullMarket Brokers, states that It is “a striking decision at the moment because, if they can freely intervene, they are going to get dollars out of them.”.

However, other sources in the city explain that this may respond to the fact that, in the last three days, the BCRA was able to stop the selling trend that it had been having in the exchange market.

Thus, despite the fact that the situation of international reserves continues to be complicated and they are located around US $ 42,100 million, on Tuesday it had bought US $ 30 million, yesterday it recovered US $ 130 million and today it was neutral (it did not sell nor bought). That run allowed the entity to reduce sales in November to $ 630 million.

The BCRA was able to buy dollars to increase reserves and relaxed the stocks for banks

And, according to some economists, this is thanks to the fact that the liquidation of wheat exports and soy which usually occurs at this time of year, so that in the last month of 2021 the BCRA’s buying trend could consolidate if the export liquidation rhythm advances firmly.

Consequently, as the economist Camilo Tiscornia, director of CyT Asesores Económica points out, it is possible that the Central is taking advantage of the opportunity to “begin to try to normalize the exchange market in line with what the International Monetary Fund (IMF) is asking for, although it is a very incipient beginning “.

Along the same lines, the BCRA this Thursday took another measure that goes in that direction: the relaxation of restrictions for banks is added, with regard to importers, the decision make flexible the terms automatic access to exchange market for imports of capital goods with advance payments of up to 270 days for all goods with values ​​of up to US $ 1 million.

It is worth mentioning that, in mid-October, the BCRA had reduced from $ 1 million to $ 250,000 the quota provided for access to the exchange market automatically for the payment of imports of goods vs. imports. Then he relaxed some of the restrictive measures for import advances, but this had remained and, today, he finally decided to roll it back. “This will especially facilitate the access of various SMEs to capital goods that will allow them to increase their production and efficiency,” the BCRA said in a statement.

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Helen Hernandez is our best writer. Helen writes about social news and celebrity gossip. She loves watching movies since childhood. Email: Phone : +1 281-333-2229

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