Wednesday, September 28, 2022

Attention companies: To prevent dollar outflow, BCRA limits seeders’ holdings in portfolio

The BCRA seeks to cover another dollar leak, seeder purchases by companies, and limit the holdings allowed for these actors. so the solution is

By Pilar Wolffelt

21/07/2022 – 19,20hs

Attention companies: To prevent dollar outflow, BCRA limits seeders' holdings in portfolio

Within the framework of the measures being taken by the government to prevent the sharp rise in the alternative dollar observed in Argentina these days, the Central Bank (BCRA) strengthened it. Control over companies to counteract dollarization of assets,

what he did was The US$100,000 availability limit for each company includes Cedeears’ holdings that the companies that have access to the official forex market may have and have ordered that These devices cannot be operated prior to the 90 days or in the 90 days at which the company had official market access.

,it’s got to be the deep of the net, This is not a solution, but another patch that fails to ease the pressure on the dollar in a sustainable way that should be sought,” says Claudio Caparrullo of Analytica.

“The measure seeks to channel the financial dollar segment because Many companies bought seeders to sell and then received dollars.”, commented economist Federico Glustein on iProfessional.

This happened, above all, in the case of some firms that have a huge amount of these types of equipment. And the analyst points out that “the BCRA measure seeks to control the dollarization trend and dollar outflow through that channel.”

The BCRA tries to pacify the dollar outflow in every possible way.

The BCRA tries to pacify the dollar outflow in every possible way.

Cedar: Why were they a problem for the BCRA?

According to official sources, What was happening was that some companies were buying seeders and keeping them in their portfolios because the possibility of buying a title in pesos and selling it against a foreign currency was restricted. The problem is that, although the company didn’t do this, someone else had to buy the cedar that was later stabilized.

And, although cedar is bought and sold for pesos in the domestic market, Since there was more demand, the newFor which it is necessary to buy shares abroad in dollars. So, even if someone buys it and doesn’t sell it, as the market grows, someone must have dollars to bring those cedars.

Consequently, as Glustein points out, Seeders’ demand for the portfolio was creating a greater outflow of dollars. in the financial market. To curb this trend, it has now been decided that the company should consider CEDEARs as part of the USD 100,000 limit, which may be held in liquidity. And, as per the provisions, if it exceeds, it will have time till September 30 to sell the surplus.

There’s a problem for Caprarulo Where are the pesos that can no longer be allocated to the cedars? And it is very likely that BCRA is looking to allocate them to other instruments in pesos, right.

CEDEARS allows investment in foreign companies in the local market.

CEDEARS allows investment in foreign companies in the local market.

This is how CEDEARs work

It is noteworthy that Argentina’s certificates of deposit (cedirs) are legal instruments with operations in the local market that represent shares of foreign companies and constitute a financial instrument that savers and companies use to dollarize their portfolios. because they are quoted adjusted spot dollars. With settlement (CCL) and in line with the dynamics of the action they represent.

In the midst of economic instability in Argentina and with persistent inflation, Cediers gained more and more strength. And, in the last year, according to some consultants, the trading volume of these instruments increased by 230%.

That’s why Glustein believes the decision will limit the seedier market and could have an impact on the price of the financial dollar, but the truth is that many in the city believe the measure is “another patch.” ” Is.

And that, as the President of Patent de Valores, Santiago López Alfaro, contributes, Argentina has significant macroeconomic imbalances that are not resolved by this type of decision. “There is a need for a political agreement that provides greater certainty and which establishes a competitive official exchange rate, as well as a path to fiscal balance,” he concluded.

Nation World News Desk
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