The crisis of the reserves of the Central splashes the yuan


The net international reserves of the BCRA, calculated using the IMF methodology, are in negative territory for US$ 7 billion, according to Ecolatina.

In this way, the coffers of the highest monetary authority are at a critical moment, a window on the verge of breaking, facing the scenario that the Government faces going forward.

In the last five days, the Central got rid of US$ 465 million in the MULC. In this way, it ran six consecutive weeks with a net sales balance. Thus, the entity headed by Miguel Ángel Pesce has sold almost a billion dollars so far this month, while the accumulated figure for the year is already around US$ 4 billion.

However, the magnifying glass is now on the sale of yuan, which began to be the variable closely followed by the market.

In the last five rounds, the Central Bank parted with nearly 4 billion yuan, equivalent to about US$555 million.

“Correctly accounting for the BCRA explosions in the MULC, the data that they produced up to Friday, so far in July US$ 953 million were sold, of which US$ 921 million were made in yuan,” explained Salvador Vitelli, economist Roman group.

Added to the June sales of the yuan, around one billion dollars, and the payment to the IMF for 2.7 billion dollars, of which US$ 1.1 billion came from the stock in Chinese currency, the BCRA has more than US$ 3 billion used of the Chinese swap.

Therefore, according to the last trip to the Asian country by the Minister of Economy, Sergio Massa, the availability was for about US$ 5 billion. For this reason, less than $2 billion of the swap with China remains.

Forward. In September there is another payment to the IMF for almost a billion dollars. The Central has little fire power to intervene and, in turn, face the payment to the international organization, so it is not ruled out that it will use yuan again, of which the monetary entity has a little less than US$ 2,000. millions.

In other words, the BCRA accounts for the swap with China for the next month and a half, which expired in the MULC in the last month and a half.

This denotes the delicate situation of the reserves.

The question is what room for maneuver the Central has to feed the demand of importers and in the exchange market with this flow of yuan.

“In the event that the negotiations continue to be delayed, the Government could again use yuan corresponding to the swap with China to cancel its obligations with the IMF. However, that would limit the fire power of the BCRA to intervene in the exchange market”, said Santiago Manopukian, Ecolatina’s economic adviser.

And he added: “Then, the longer the arrival of disbursements is delayed, the greater prudence the Government must have with respect to the use of yuan in the exchange market. Similarly, if the authorities intend to maintain their rate of intervention, they should try to reach an agreement as soon as possible.

During June, the Central Bank sold yuan on the MULC at a daily rate of US$50 million and, so far in July, a rate of almost US$100 million per day. If it maintains this level of intervention, the BCRA would spend the entirety of what is left of the Chinese swap in September and will have nothing to do when the Fund expires.

If the negotiations with the IMF become even more tense, analysts do not rule out the government negotiating with China for the free availability of the entire swap.

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