The Central Bank has been losing $1.66 billion since September 15, the day the super-trap installed. Yesterday the gross reserves closed at $40.84 billion. It estimates that part of yesterday's fall links to the decline of gold (-1.73%) and the yuan, with the latter having an impact on the total due to the swap with China. The BCRA ended the day in a neutral position, that is, without being a net buyer or seller of foreign currency.
The return of international tourism will increase the dollar deficit. Analysts predict that the new normality will leave a deficit of $7 billion that will aggravate the problem of foreign currency shortage. The shortfall will expand in two ways. On the one hand, due to the effect of the gap, the "dollar card" will be cheaper than the "dollar bill", since Argentineans who manage to travel abroad will prioritize card spending before cash payments. On the other hand, foreigners arriving in the country will be more convenient to sell the dollars in the blue than to pay by legal means. In the informal sector, they would receive 163 pesos per dollar and in the exchange houses, 75 pesos per dollar.
Argentina is heading towards its seventh currency devaluation in 20 years, analysts say, as pressure builds on the peso and investors lose faith in the government’s ability to stabilise the economy. The country struck a deal to restructure $65bn of foreign debt in August, shunting debt repayments far into the future. But financial markets remain fragile. Bond prices have dropped back down to distressed levels, equity prices have collapsed and the gap between the official and black market exchange rates is widening. Analysts and investors think that with just $1bn in liquid reserves to hand, Argentina’s central bank will be forced to tighten restrictions on imports and reset the peso at a new, much weaker value.
The Central Bank (BCRA) sacrificed some $3.1 billion of its reserves in interventions on the local exchange market since last August 4; the figure comes from the balance obtained in the 45 wheels after that announcement, considering that the official data updated until last Tuesday, October 6: in 40 of them it had to sell. The reserve crisis feeds back by impacting on the exchange gap, the country risk rate (which today is close to 1400 points and rises 38% after the debt renegotiation) and accelerating the withdrawal of dollar deposits from the banks, a stock that contracted 10% (fell by more than $1.7 billion) since mid-September.
The gap between the official exchange rate and the other dollar quotations is ruinous for the Argentine economy. However, it is also a business reserved for some privileged groups that have access to the official dollar at an exchange rate of 78 pesos, while acquiring foreign currency through the dollar stock exchange exceeds 144 pesos, and the dollar "contado con liquidez" is 155 pesos. With this, the triangulation of official dollars between importers and "ghost" companies abroad has resurfaced—also, the incentive to corruption manoeuvres with official entities.
In September, Argentina again registered the second-highest inflation in Latin America, after Venezuela. Although the National Institute of Statistics and Census (INDEC) will only publish last month's data this Wednesday 14th, private consulting firms have already estimated that the result was around 3%.
The World Bank (WB) predicted this Friday that the economy of Argentina, which had "one of the longest quarantines in the world", will fall to 12.3% this year, the most pronounced drop in South America. The GDP will recover to 5.5% in 2021 and 1.9% in 2022.
In the year 2019, 24,000 tons exported and in 2020 and part of 2021 an export of 49,000 tons is expected. Between October 2019 and March 2020, exports were close to $220 million. The operation involves refrigeration plants in several provinces. Ninety-eight rabbis and auxiliaries arrived to certify the process of kosher meat slaughter in about seven national refrigeration plants, and between the end of October and the beginning of November between 120 and 140 more would arrive.
Yesterday, the debt swap for $279.8 million of Banco Hipotecario, the first company to carry out a restructuring since the Central Bank restricted the sale of foreign currency to only 40% of the capital owed, was completed. The institution will use its savings to face the $204.08 million it has to pay. Of the total to be paid, $56 million deposited in the country and the rest is abroad, so there will be a drop in the Central Bank's gross reserves.
Revenues in the province of Buenos Aires reached 43.6 billion pesos ($565.48 mn) in September, a nominal increase of 23.6% compared to last year. Although this growth is still below the level of inflation, "collection continues on a gradual path to recovery.