The BCRA is not going to send it; eat the feud: an low energy levels are slow and controlling a financial basis so that there is no risk of inter-commercial jumping that is in place; closing the level of inflation / valuation expectations.
The Tequila outbreak in Mexico tells us that a reduction in the level can be reduced after a crisis of profit-making payments by its & unforeseen risk. Mexico BCRA fell from 74.8% in April 1995 to 33.5% in September 1995, the dollar price increased by 27% and BCRA needed to increase its level to 53%.
Although the BCRA removed the Leliq ground floor of 60% TNA (weak before the previous financial regime) after the levels were increasingly involved in inflation, BCRA strengthened an understanding in two main part:
1) Please indicate that you are going has met the financial base objective in December (expanded by 6.3%) at at least $ 16,000 million. That is, they will not use all levels of cash increase in December ($ 170,000 million bringing the relevant currency data to 5 December) from their cash program by & # 39; pull after November to last and target longer than December.
2) Inconsistency with the edge of interchange changes that make it more sustainable (alert). In December, the difference that is buying in the market is the changes in the floor; band at the maximum of $ 50 million per day (the interval comparison of $ 150 million per day in the roof of a band), with a monthly financial case of 2% of BM target in December ($ 27,000 million). In this way, a lower level of interventions that are expected in the floor may be; bands increase the chances that the exchange rate will drive the lowest band if the demand for pesos is a strengthened.
Extension of special date
From the effective date of its financial program on 1 October, private sector investments in this private sector Translation grows by 21.3% in just 2 months, with business experience more than $ 1 million, increasing almost 28% in that period.
In terms of results, which established a fixed term during the time they were returned, including the standard level of the system, 15% in dollar, with a combination of the upper stages in pesos and the decrease indicated in the exchange rate of the upgrades at the end of September.
Do they have room to continue?
Due to the fact that the jump is connected to a special process, almost unrealized (above those that come from using normal rate level) is a & # 39; appear in time deposits of the size surveyed in the last 2 months.
The future will depend on the route in the coming months a good degree of dollar level equilibrium flexibility, which is closely related to the country's endangered fortune and its cost of landfill financing.
The Argentinian Central Bank (BCRA) president, Guido Sandleris (EFE)
How does the level of dollar balance balance?
The real confidence set is not in the exchange market, where rates blowing they can always help to consolidate them in the short term at a very high cost for the level of activity, but in the case The cost of funding that the nation's market wants.
Not only in the context of a sustained decline in rural danger is the level of interest required to reinforce the demand for money at levels that are consistent with returning money to families and businesses with reasonable reusability.
So far, the rate of interest required to comply with the & # 39; money program, with banks with no other choice but to go to LELIQs to provide the dollarization of assets, credit rationalization and decommissioning arrears to the minimum level of money managed by & # 39; allowed. (versus its monthly average), lower than the extent to which the big players need to stay in a fixed time and not; going to the dollar, which includes the floor to the rate; need compensation at risk free of the Treasury vans, rural risk and expectations for reducing.
The rates on which is susceptible to a leopard reduction bend of the levels in pesos for the next few months that are consistent with the Lecaps level to 180 days in a TNA 35% by the end of April 2019 vs. current level of 47.5% TNA.
The same thing is true for its REM and Media, Leliq level expectations of 51% TNA as of March 2019 vs. Current level of 59% TNA Therefore, the predator must verify the profitable profit level by stretching down a loop in pesos for co-termination rate (decision) vs. The risk of getting the dollar back from the shop is low (exchange rate impact).
Theoretical exercise: the potential capital output may be possible from a 500 degree point of transition (with a Leliq rate ranging from 60% to 55%) for A band in 3-year pesos is completely protected by the theoretical path that can finally be the low-level dollar to the middle of its band.
What does the decline in rural danger depend on?
At risk in the country that the most recent week was September and 5-year CDS contracts that appear to be 37% in that period, three Things that do landing down the depreciation of financing in foreign currency: the political risk facing the election year in a dark context, an uncertain world and high reach among geopolitical changes in size and markets that are still too heavy in Argentina's debt following emissions from 2016, 2017 and early 2018.
Although these factors continue, and after learning lessons from time to time, the BCRA may be able to; Choosing to step by step, without placing a low-level and low-grade weight pressure; closing to optimize hopes, preventing its & # 39; a credit that arose during the past months with financial policy with high costs for activity.
If this is the case, today's advanced levels might reasonably lower down the path. In a faster or longer period, the BCRA should apply to a wildcard of unpaid holdings so that LELIQan level banks do not decrease in reducing the rate of Badar that will cause endangered base investments at risk. .
2019: How does it suit the economic designation of around 30% with a "broadcast 0" cash program?
In fact, the cash coin will grow by 19% by 2019, 1% per month will be a Each monthly program increases.
Sandleris, head of BCRA.
The movement of shipping will be given by highlighting the weight of the exchange rate; drop off the lowest band to grow in the demand for money. There is nothing easy in a year of election where the demand for cover and rural danger can dance to the election elections rhythm.
What is clear: to bring the fish to annual inflation of 30% in December 2019 with salaries which are around 35% and 50% share levels, the exchange rate must move 20/25%.
Therefore, the level of fall can not be rapidly and the BCRA will continue to control its & # 39; financial case to defer the oversight of the economics with inertia in agreement and contract registration record (rates to the dollar and retire to inflation), on the cost of multiplication Company margins (increase in unemployment?).