Thursday, March 30, 2023

Dollar savings or tariff support: how much the purchase of foreign currency fell almost six months after the announcement

According to the report “Development of the Exchange and Balance Market” provided by the agency, it can be seen that the implementation of the measure favors the Central Bank to reduce by half (-50%) the number of people who have made for currencies. The accumulation is compared to the worst moment of the run to the dollar in June 2022, after the departure of Martin Guzmán.

The data indicates that of 1.4 million people who bought foreign currency in June 2022, the number falls on 727,000 people from the data from January 2023. If the month before the measure and after the measure is observed, there is almost a decrease. 40% In September 2022, even with the new payment in the middle of the month, 1 million people bought the currency. Already in October there were 619,000 people.

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Dollar Savings Or Tariff Support: How Much The Purchase Of Foreign Currency Fell Almost Six Months After The Announcement

And if the flow of dollars is seen? In September 2022, where the subsidy measure has not yet taken full effect, 191 million were acquired in the exchange market. Meanwhile, in October the figure dropped to 117 million. This allows us to reach the following conclusions:

  • The implementation of the BCRA measure allowed the number of people who bought dollars to drop to similar levels last year or lower, in some cases up to 40% with the addition of the new restriction.
  • – September 2021/September 2022: 746 thousand uniques vs. 1 million.

    – October 2021/2022: 762 miles 619 miles vs

    – November 2021/2022 : 926 thousand vs 575 thousand.

    – December 2021/2022: 907 thousand vs 662 thousand.

  • Despite the fact that this measure slightly decreased the number of people who went to the commercial market to gather, the Central Bank could not prevent the upward trend of buying savings dollars. Although it has fallen over the years, if we look at the monthly series from September to January 2023, the number of people continues to rise, except for one month.
  • – October 2022: 619 thousand people bought tickets.

    — November 2022 : One thousand 425

    – Dec

    – One thousandth of January 2023

    In addition, it can be seen that the trend of buying increased when the tension in the market is variable, except in November when the blue rose by 8.2%, but still the number of those who bought savings dollars was smaller. The trend changed in December 2022 and in January 2023 when informality increased by 10%.

    Subsidy reduction: what happened to the purchase of dollars?

    According to the investigations carried out by two fracture firms, since the implementation of the Government measure on September 15, 2022, there has been a 35% increase in the volume of operations. But not only things: “when there are abrupt movements in the dollar, more accounts are opened, more MEP works” were revealed with mbito. From this it is evident that the purchase of the dollar never ceased, but that it was diverted to other channels. According to this movement, the value of the parallel dollar rose.

    Economist Federico Glustein, consulted by Ámbito, shows that the savings dollar continues to be important for the monetary authority: “its importance is high because it continues to be a constant source of currency from the system to a buffer or even a wallet. Many times puree makes the difference between savings and blue. However, it is true that the largest the cost for BCRA is the cost for cards for consumption by non-resident suppliers, which in January 2023 reached US$374 million, while reaching a net amount of US$139 million.

    “The power of human beings to collect could be controlled, but it is more difficult to enforce the cards, because they are difficult to prevent,” he said.

    Dollar savings: the balance of measures and what is expected for 2023

    Almost six months after the implementation and account of the current price of the parallel dollars, Glustein said: “the support of the blue dollar and the MEP in the zone of $360/$380 in price allows agents who want to make a strong purchase. The currency is not inclined to savings to migrate towards parallels and cash so, if I continue this, the assessment could happen and fewer people will get a saving dollar.”

    “On my part, I believe that more than 700,000 people who acquire foreign money to collect can be controlled in that the number of buyers will hardly grow due to strong constraints, but it does not fit in terms of financial flows. and less in the context of the drought where about 15 billion dollars will be lost in 2023 and in turn the economy could fall at least 1% a year”, he said.

    “The BCRA thing is appropriate to strongly restrict the purchase of dollars by people, because it was a permanent source of funding. But the investors were more than expected, which made the price blue and the currency rise, generating various fluctuations. Then the “Qatar dollar” was implemented because it was not enough with the dollar card, therefore, because the public policy is incomplete, the amount that served to cover the harvest due to the economic situation”, concluded Glustein.

    Nation World News Desk
    Nation World News Desk
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