The central bank formalized the instrument that would allow exporters to advance USD 5,000 million over the next 60 days to bolster reserves, in line with yesterday’s announcement by the new economy minister, Sergio Massa. This is a 180-day letter that BCRA will issue in favor of banks and will pay an interest rate higher than the market rate. Entities will then turn around and automatically present them to the exporters.
thus, Companies will get additional incentives in the framework of pre-export financing. The idea is that these currencies can enter the local market, but without the obligation to settle them within a maximum period of 15 days. “Now companies will be able to wait up to six months to convert those dollars into pesos, the day they choose to do so,” said sources in the monetary unit.
From both the economy and the BCRA they deny exchange incentives to attract dollars from exporters., “Any sector you talk about, they want to enter Forex on the Dollar Stock Exchange and that’s impossible”, They explain.
Massa, in his assumption as head of the economy portfolio, had assured that he would have a commitment of USD 5,000 million for the next 60 days, as well as from grain companies for other sectors such as mining and fishing companies. It aims to strengthen reserves and bring more peace to the forex market. In addition, they will seek to add another USD 2,000 million from multilateral organizations such as the IDB and the Andean Development Corporation.
Therefore, exporters who enter foreign exchange in the local market will have the flexibility to hold on to the dollar for a much longer period than the current market. And they will also get a higher rate of interest than what is offered by the banks today. This will result from a tender which will be done by BCRA itself. It is estimated that before the liquidation of foreign currency in the local market, leaving dollars overseas would exceed the yield the grain or mining company itself would receive. The circuit closes with the exchange of dollar pesos, which are used to pay agricultural producers for their production.
Exporters entering foreign currency in advance would have to “carrot” through a bill in foreign currency that would pay an interest rate higher than the market rate. They can wait up to six months to settle the dollar.
On the other hand, The BCRA Board of Directors also enabled access to dollar-denominated vision accounts for exporters who expect settlements to exceed thirty days with respect to the period stipulated for each sector. This is a measure which was announced by the former economy minister at that time, sylvina batakisowas, but was no longer implemented. In this way, companies are covered from the depreciation jump, as they will be able to invest their pesos in an instrument that adjusts according to official dollar growth.
The reserve position reached a dramatic point as BCRA continues with strong daily selloff. In the first four days of August alone, it had to intervene with USD 840 million, while in July it lost over USD 1.2 billion.
with a picture like this It is estimated that while the commitment with the IMF is to reach USD 6,500 million by the end of the year, the net reserves do not exceed USD 2,000 million. Liquid reserves will already be in negative territoryTherefore dollars from the reserve requirements of foreign currency deposits will be used to meet the market demand.
Massa’s strategy in its early days has been to put the most pressure on the issue given the potential for a new overflow of financial dollars. As stated on Wednesday, the intention is to gradually reduce the rate of exchange rate differentials from this improvement in the level of reserves.
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