It is more than likely that this week the government will formalize a flexibilization of the exchange operation known as “Dollar counted with settlement”, as anticipated on Thursday in the Idea colloquium by the Minister of Economy, Martin Guzman.
What the market expects is that it will return to the current operating mode until September 15, when operations could be completed in three days (and not five as before) and investors “Non-residents” They had permission to operate, not like now, they are excluded from that market.
As is known, the restrictions did nothing more than reheat the foreign exchange market. The Cash With Liqui was around $ 130 pesos the day before the mid-September regulations. This Wednesday came to $ 168 and closed on Friday in $165, perhaps as a result of Guzmán’s announcement.
That 30% shot in a month it reflected the nervousness of investors who want go from pesos to dollars, especially from non-residents. The bets of the hedge funds it was to be able to get out at a not so high price by buying the bond in dollars Argentine law that Guzmán promised to issue as soon as the swap operation concluded.
The plan agreed with the large funds, including PIMCO, was carried out three tenders for a total of US $ 1.5 billion. The appeal for PIMCO and other funds: the dollar bond could be paid with bills and bonds in pesos issued by the Treasury.
The collapse of the swap bonds, which went from yield 11% annually to 15 or 16% annually, disrupted plans. It would have been unfeasible to take new debt, above in dollars, at that interest rate, when the guiding idea of the economic team is to stop issuing debt in dollars.
The amount of money of those who want to leave for the “counted with liqui” was measured by the authorities in an amount of pesos equivalent to $ 7 billion. In the market, they believe that the figure is somewhat lower, but just as shocking: 5,000 million dollars. And it is not just about non-residents, but about Argentines who want to have dollars, and have them outside the country.
With the operation stuck, that is to say without liquidity, the logical thing is that the price would rise, in a typical door effect 12.
The other reason why Guzmán wants a more relaxed “counted with liquid” operation is because on November 21 there is a mega debt maturity in pesos for about 170,000 million, equivalent, today, to 1,000 million dollars. In addition, bills for another $ 160,000 million mature.
If the owners of those bonds or bills in pesos, seeing the money that they have lost due to the soaring of alternative dollars, seek to exit the peso market due to a blocked CCL, the quote can jump even higher. One option that the market is considering is to cut this expiration with a new dollar linked bond, that is, a bond in pesos but adjusted by the official exchange rate.
These bonds are a hedge for institutional investors and a bet for those who want to “capture” the devaluation or for an acceleration of the rate of devaluation. Last week, Economía issued a bond for the equivalent of 1.7 billion dollars.
The economy and the Central Bank are convinced that with the new rate hike that they established since Thursday, the exchange market should calm down. The project of tax exemptions for certain operations in pesos, they believe in the Government, should also take pressure off the exchange rate.
The official vision is that go through two months hards until the end of the year the dollars from the fine harvest. For now, they are not satisfied with the volume of dollars that the cereal companies settled for the exports of grains and derivatives. President Alberto Fernández himself complained.
One in favor: wheat touched the stock market on Friday Chicago the highest price in almost six years. The Government, likewise, struggles with skepticism from the market in general and from grain producers in particular: the gap between the official dollar and the parallel is an invitation not to sell the grains to the cereal companies. They prefer to sit and wait for the devaluation that Alberto Fernández and Martín Guzmán denied this week.