The government will auction off from 9.6 billion euros to control the dollar

Some of the dollars that will be sold come from the agreement with the IMF and another part of the dollar bidding calls executed for months., official sources said.

The government will sell foreign currency in order to obtain the necessary pesos, mainly to finance its current expenses, as provided for in the agreement between Argentina and the multilateral organization.

We will launch tenders where the dollars will be sold at the current exchange rate, as part of a transparent operation, the objective being to make us pesos, not to apply a foreign exchange policy "(Nicolás Dujonve, Minister of Finances)

In this context, the dollar fell slightly by more than 1% due to the announcement of the Treasury, motivated by expectations that auctions would increase the supply of dollars in the local market, penalized in recent days by economic data. negative and an increase in electoral uncertainty.

In statements to the Argentine press, Mr Dujovne said that the government's action was of a different nature than that of the Central Bank. In this regard, he stated that the monetary authority has an area of ​​no intervention but that it does not intervene outside the area.

"We will issue bidding calls in which the dollars will be sold at the current exchange rate, as part of a transparent transaction, and whose purpose is to make us pesos, do not adopt an exchange rate policy "the official stressed.

At the same time, he said: "We will sell dollars at the current exchange rate in daily bidding at the prevailing exchange rate.When there is a foreign exchange transaction, there is a influence on the foreign exchange market but the purpose of the operation is not to change the exchange rate.The objective is to convert dollars into pesos. "

He added that they had to "convert the dollars into pesos because there was an excess of dollars and the program was in pesos".

The holder of the credit institution, Christine Lagarde and Finance Minister Nicolas Dujvone met in Washington on Wednesday afternoon. The meeting, which was not scheduled, lasted 45 minutes and was "cordial and constructive", according to qualified sources.

The meeting between Lagarde and Dujovne took place in the run-up to the IMF Executive Board meeting (it will take place at the end of the month) during which will be badyzed the report on the situation in Argentina which developed the mission chaired by the Italian Roberto Cardarelli.

This report – which will be rejected in a positive manner – will allow the disbursement of a further tranche of about US $ 10 billion in funding under the confirmation agreement between Argentina and Mexico. l & # 39; entity.

We will sell dollars at the exchange rate in the daily auction at the prevailing exchange rate. When there is a foreign exchange transaction, there is an influence on the foreign exchange market but the purpose of the operation is not to change the exchange rate. The goal is to convert dollars into pesos "(Nicolás Dujovne, Minister of Finance)

It should be kept in mind that the dollar rose 4.8% in February, dampened by the zero tolerance of the Central Bank. In order to moderate the escalation this month, the monetary authority came out on February 20 with sales of futures contracts, a further rate increase (over 50%) and a larger increase absorption of pesos through a call for tenders from Leliq.

At the same time, the second week of March, the currency was warmed against a backdrop of high inflation and with a country risk above 780 basis points. So much so that on the 7th of this month the dollar jumped by 4.3% to reach the record of 43.50 $ of the banks and agencies of the city of Buenos Aires, according to the average of dominio.com, despite the fact that the central bank validated rates, absorbed pesos and intervened in futures.

It should be noted that since 1 October 2018, the Central Bank has started to implement a new monetary policy system in an attempt to "reduce inflation and regain nominal pegging for the economy". This is a strategy agreed between the Government and the International Monetary Fund as part of the agreement to extend the loan to Argentina for a total amount of $ 57,100 million.

In this context, the monetary authority is committed to not increase the monetary base until June 2019 whose goal is implemented through the daily operations of Liquidity Lyrics (Leliq) with the banks.

In turn, he established that Leliq's interest rate is set by the market. In this sense, the Central Bank intervenes only with amounts, while the Monetary Policy Committee determines the number of Leliq placed per day.

Another of the main axes of the new monetary policy concerns foreign exchange intervention zones, which are discounted until the end of the year at a rate of 2% per month.

Today, the "no-intervention zone" established by the Central Bank goes from $ 38,964 to $ 50,424. Within these limits, the authority exercised by Guido Sandleris can not buy or sell currency. It can only do this when the price of the dollar exceeds the exchange rate ceiling.