Sandleris and the IMF have a plan B?

The rising dollar puts the government at a disadvantage in the meantime (counting almost the number of days) that the crop appears and the International Monetary Fund approves the disbursement of nearly 11 billion US dollars.

That the ticket does not find a containment mechanism is what worries the market. Moreover, the fact that the central bank limits itself to putting an end to the volatility of the exchange rate, whereas it could reduce it with a minimum of intervention, generates a discomfort due to the political cost (the feeling of reticence of Cambiemos) and economic (promote the greatest inflation).

"It is impossible to manage an economy in which everyone lives while waiting for the evolution of the exchange rate. The central bank should be able to intervene to avoid short-term fluctuations, especially if the amounts it needs are low, "said Miguel Kiguel, one of the most heard economists at Casa de Rosada and at the Central.

In the government, they know that the dollar reaches 44 dollars is very bad news (closed Tuesday at 43.67 dollars), but they hope that the supply of currencies will seem to extinguish the fire. There is no change of speech in this sense. The same is true for the International Monetary Fund (IMF), which will process and approve on April 5 the third review of the Argentine file on the release of the coveted dollars.

Even if he was not held to the fact that the agency would approve the disbursement of nearly 11 000 million US dollars, from the beginning of April, it will accelerate the plan of sale of dollars already announced by Nicolás Dujovne . It would also start in the middle of next month.

US $ 60 million a day, plus the field's contribution of US $ 50-75 million, should stabilize the equilibrium and even bring down the dollar. This is what they imagine in the central region and in the Fund: the ticket will be closer to the lower band of the non-intervention zone.

This is the only letter in which this economic stabilization plan is developed between the government and the agency. The supply of foreign exchange comes almost exclusively from what farmers can liquidate. Although the trade balance is no longer deficits as before, the megaevaluation barely ends up being linked. As a result, there is no longer a supply of foreign currency from other exportable sectors.

Without emergency measures

In the future, there is no plan B for the IMF and central countries. Read, there is no possibility of changing the pattern, despite the current volatility of the exchange rate. They believe that this greater currency supply will give the zero-growth plan of the money base sufficient time to dry up for when this larger amount of dollars is not (imagine from May or June when it will there is no harvest motto). And that's why they will not change the roadmap that they believe will begin to bear fruit in the coming weeks.

Obviously the government would have liked a less strict program with greater freedoms to act before such times. But they have always clashed with David Lipton, the first deputy managing director of the IMF, who takes the lead in trade with Argentina.

The American is the one who is the most opposed to the official wishes to have a greater freedom of intervention. Even during Roberto Cardarelli's visit at the beginning of February, the credit agency spared no effort, but the government let go beyond the need to reduce the width of the non-profit zone. intervention.

The intention was to put the issue on the table – something the Fund had already totally ignored – in order to generate media pressure. Casa Rosada understands that the fact that a 30% devaluation is allowed between the floor and the ceiling of the strip leaves them very exposed. The request, which was never formal but would have been examined, was intended to reduce this band during an election period. The categorical answer was, again, not.

The maximum that Argentina could get through the Fund was to let them sell the surplus dollars to pay their bills in pesos, the famous $ 9.6 billion that will be auctioned from April until April. At the end of the year.

But the $ 60 million a day is not used to stop a race against the peso, something widely known in the body. Lipton even thinks that in moments of nervousness, we must let the dollar find its balance: although it costs Mauricio Macri the re-election.

The Fund bureaucrats do not want to "give" their dollars in the event of a race against the peso and believe that in this scenario, the market "would anyway be maintained at the BCRA". Therefore, do not think that relying on strong dollarization will change the outcome.

Of course, the body does not have this scenario as "base". He maintains the hope that the plan developed jointly with the government to dry the peso's place will work and that it will reduce "including dollarization during the election period".

They calculate in official corridors that the zero-money plan will make between 10% and 13% less money on the street in May-June. The plan is to reinforce what Guido Sandleris says publicly: "If there are no pesos, there is no way to buy money".

Did he realize that? In the market, they know that there will be volatility, but they expect that at least in the coming months, the soybean exchange rate and the Fund's dollars will be determined.

This could underpin the campaign for change. In the official distribution, they even imagine that there might be some "monetary illusion". In other words, increases in pensions and allowances, added to the private sector between peers, in the middle of a still dollar and slightly bearish inflation, could "recompose" some consumption. We will have to see.

In the meantime, and if the exchange rate is effectively restored until May-June, the Central Bank could step up its measures to improve market conditions when it is necessary to adjust again.

Without offer

Today, the dollar's rise is due more to shortfalls in supply than to increased demand (even though there are more institutional investors buying banknotes). In addition, the saver does not receive the "super rates" paid by the central to the entities.

As a result, work is underway to bring the Leliq to 30 days to force banks to pay more for fixed deadlines. He drew the market's attention to the fact that the measure had not yet been unveiled: it is known that there remains only the director general of the BCRA, Nicolás Gadano (who has the power to change the term of letters) – put the hook.

For the banks, the delay in the confirmation of the measure could be due to the fact that the central bank is waiting for the largest offer of dollars and that the rates are falling "endogenously".

"It makes no sense to let Leliq out at 30 days so that the banks can adjust to rising rates if, as they expect, the soybean dollar will come in and, with a downward pressure on the rate of change, yields will also drop a bit."said a banker.

The other option, that of "market makers", has also not made much progress. "We badyze all the options and there is no deadline to launch anything," they say in the central region. In this case, it would give more liquidity to the square and thus dampen the speculative movements.

"When soybeans come out, it will become clear that there are no pesos to buy dollars," a senior Central official said, adding that he "s not going to buy dollars," he said. There was no plan B. All chips are placed in an "alluvium". exchange rate that would come from the next few weeks.

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