Operation Dollar: why Guzmán will do (from today) the opposite of what has been done until now

Once the stocks were launched, there were two ways in which companies were eroding reserves more than usual. On the one hand, importers bought dollars at the official exchange rate, advancing payments that habitually “matched” with their suppliers, under the idea of ​​a future devaluation, generating a species close to the self-fulfilling prophecy (the more speculation, the greater the demand, the less Bookings). The other is that companies that maintained debts taken abroad used credit lines in pesos at subsidized rates to buy official dollars and prepay those hard currency loans. The BCRA arrived there to regulate these operations.

Despite the measures, the declining trend in reserves continued. Since mid-September, when Pesce announced more restrictions, the number of dollars in reserves has fallen by more than $ 1.7 billion. So far in October, the balance is negative at almost $ 600 million.

Given the results, Guzmán promises to move in the opposite direction, although without dismantling, for now, the greater controls on the demand side. To do this, he proposed making cash operations more flexible with settlement, giving that market more liquidity, perhaps that individuals who do not usually do operations on the Stock Exchange can, with a home banking button, buy or sell securities to generate supply and demand of that financial dollar. Guzmán assumes that this would give a more limited value to that price and, therefore, would reduce the gap. It plays against the new tax on the saving dollar, of course, which puts a “high” floor on that goal.

One of the measures that the Minister of Economy will take is to cancel the days of “parking” that he imposed on non-resident investors to make cash with settlement. The short story says that there were investment funds that wanted to leave the Argentine market and that they were positioned in pesos. What they did was sell their assets in pesos to buy dollars through the Stock Market, therefore, the parallel prices rose a bit. The government told them not to do that, that they were going to offer them bills in pesos, and that when those bills expired they would auction them for dollars. Thus, they could “get out” without putting pressure on the parallel exchange rate. An auction was to be held in August, another was to be held in September and the last one in November. But August arrived, the bills expired, and the government looked the other way. That is, they did not auction them. Then those funds began to do “liquid” operations. The government’s response was to redouble the bet. They put a 15-day “parking” for those who wanted to make cash with liquidation, as long as they were non-resident investors. Now, that measure would be without effect.

Another of the shortcuts that Minister Guzmán will seek in the coming days was anticipated by himself on Friday, when he advanced on social networks a project that will seek tax incentives for investments in pesos. It is thought that assets in pesos that are indexed with cer, grape, etc., but also other assets in national currency whose ultimate objective is a productive investment are exempted from Income Tax. At the same time, an exemption from the Personal Property Tax, negotiable obligations, assets destined to finance productive investment and participations in mutual funds and trusts whose underlying assets are already exempted assets were considered. The required reading is that, at the same time, the Economy proposal seeks to tax in Personal Assets certain investments that until now are exempt and that were so since the creation of the tax. The logic is that, in order not to be subject to the tax, they would have to remain in the equity for at least 270 days of the year (75% of the duration of the year), continuously or discontinuously, or be maintained from December 1. until the month of May of the following year (fixed terms, common funds, negotiable obligations, deposits in savings accounts are of the item).

One piece of information that will not escape the question is what will happen with the aforementioned objective of giving greater cash liquidity with settlement. If these operations are now reached by the new tax framework proposed by Guzmán (to do cash with settlement, you have to buy and sell a bond or a share for a short time), it could be thought that instead of stimulating the operation, progress is being made in the opposite direction .

Meanwhile, in the BCRA they resist, until it is clear if the IMF is going to help with an injection of dollars. On the one hand, they slow down import authorizations where orders accumulate, according to sources in the sector. On the other, they add informational filters, that is, bureaucracy is added that works as an additional currency management device. This brings with it some problems that will begin to be seen. For example, companies that are dedicated to the sale of steel and iron, such as Acindar, speculate and begin to incorporate “filters” to decide who they sell to, under what conditions, and for a few weeks they closed the possibility of stockpiling. In other words, in recent days they have added obstacles. This could also complicate a sector that is the strong card of the Government. It’s about construction. If cement is sold but there are difficulties in making iron, then construction slows down.

The rate hike was also the decision of the BCRA. The interest rate paid to banks for repo transactions rose from 27% to 30%, and which has been climbing from 19%. It is a gradual movement. Very. On the other hand, it implemented a reduction in the rate paid by the Leliqs that financial institutions have up to 37% per year. In this way, it frees pesos that the banks are going to use to buy debt from the Government, a kind of magic trick that “transforms” the issue that the BCRA turns to the Treasury into a kind of handrail, first, with the banks and they are the that finance the Government, which might not be of such interest to the banks if it becomes repetitive and grows in magnitude. Yields on fixed terms of less than 1 million pesos also rose from 33% to 34%, and those of more than one million pesos went from 30% to 32%.

The week that starts will bring more questions. Will this time the combo of measures serve to stop the rise in the price of the dollar or does it show, instead, that there are not so many tools after all beyond accumulating restrictions? What attitude will Kristalina Georgieva, the head of the IMF, add, who went from supporting the government’s actions to asking for a “credible” plan for the Argentine economy?

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