On Wednesday, the Central Bank published a new regulation to counter the cap. It was the fashion investment in the city for the past two weeks. Retailers who buy foreign exchange on the official market must wait five business days to be able to trade bonds and take advantage of the implied exchange rate for the dollar. The client who buys currencies must sign a voucher that promises not to obtain titles in a week. The measure affects smaller savers.
"Argentine investors' ability to dollarize has no comparison. Less than ten working days have passed since the application of the currency controls and three exchange rates began to function in the market ”. That's what one of the best consultants in town told this magazine. The official dollar stood at 58 pesos on Wednesday. The exchange rate of 63 and the dollar to escape foreign currencies at 69. This last price is called cash. The difference with the official exchange rate is 1
Retail investors have so far used the loop without controls. The center did not interrupt the operation but limited its capacity to do so. Savers have to wait five days each time they make the investment and for smaller investors, the opportunity to reach a monthly purchase quota of $ 10,000 is difficult. Individuals with greater savings capacity (equivalent to $ 2,500 available) can continue to take full advantage of the role.
The operation is easy to perform and can return up to $ 600 in minutes. The mechanics of this investment have four steps. An example:
1) The saver with 2610 pesos buys $ 45 at the official exchange rate (58 pesos).
2) Use these dollars to buy a Bonar2024 (each bonus costs $ 45).
3) Order for immediate sale of that title in pesos (for each bond gets 2840 pesos).
4) The saver uses these 2840 pesos to buy $ 49 on the official market.
In this For example, the retail investor goes from having $ 45 to $ 49 in minutes (about 8 percent of gross profit). The broker collects commissions so the net profit of the operation is between 6 and 7 percent. The same investor if instead of starting at $ 45, starting at 10,000 (quota for buying official currencies per month) can take about $ 600 in minutes.
The link between the official dollar and the dollar share provides an incentive for the retailer to buy currencies for the total monthly quota. The problem is that these operations increase the demand for foreign currency in the official foreign exchange market and may force the central government to intervene to contain new increases in the exchange rate.
Per month, there are more than one million people buying currencies. If only 10 percent of these individuals use their total quota, the monthly purchase would increase to $ 1 billion, causing exchange pressure. The figure is important and the level of liquidity reserves is starting to be at a critical point. This was one of the main reasons that led the monetary authority to try to limit the operation.
Gap and Expectations
The other point of tension is the growing gap between official dollars and cash with liquidation. On Wednesday last week, the bank account was negotiated for 61 pesos: a 5 percent difference with the official. This Wednesday the price rose to 69 pesos and widened the gap by four times. That is now 20 percent.
Consultants began to monitor this indicator closely. The price difference between these two quotes can increase the instability of the domestic market for various reasons. Economists consulted by this newspaper agreed that the main part is that as the gap widens, expectations of devaluation in the official exchange rate and pressure on reserves also increase.