The reserves of the central bank blow | I fell hard …

International reserves were less than $ 60 billion. This is the lowest level since mid-December 2018 before the entry of IMF quarterly credits. This Tuesday, the fall was 3016 million dollars. The payment of the debt to foreign banks largely explains the decline. Until August, a loss of 8509 million dollars has been accumulated and since mid-July, 9357 million dollars. At the Central Bank, they reiterated that their priority was to deal with the reserves. The dollar closed at 57.39 and recorded a decline of 1.3%. Country risk ended in 1859 points.
Lack of dollars is the main factor of instability in the domestic market. In recent weeks, currency loss has accelerated and concerns over external debt repayment opportunities have increased. Banks have called for early repayment of a repo loan and caused a further collapse of the badets of the plant.
The exit of dollar deposits of bank customers is the other factor of collapse. This is because the reserve requirement is calculated as an badet of the plant. The debt risk rating agencies observe in detail the attrition of the financial situation and the decision is to lower the bond rating. Fitch again showed little optimism for the country: he said that dependence on the dollar was the problem of the economy.

Reservations and deposits

The president of the Central Bank, Guido Sandleris, said Tuesday that one of his management priorities was to occupy reserves. Last week, about $ 500 million was used to try to contain the devaluation. This figure seems moderate and, at first sight, allows Sandleris to agree that "nothing has been wasted to keep the exchange rate artificially". But the inconsistency was another.
The plant published a devaluation of 25% which was not insignificant. The panic of recent days has caused the decline in foreign currency deposits of banks and accelerated the decline of the currency of the monetary authority. Deposits indicate that between Monday August 12 and Wednesday 14, deposits of $ 1193 million were lost. The decline in the daily average was 398 million euros and begins to alarm badysts.

Payment of the debt

The erosion of reserves has begun to raise doubts about the ability of the economic team to cope with debt maturities in the coming months. The head of the monetary authority took advantage of his press conference to ensure the safety of investors. "The Central Bank and the Ministry of Finance will honor their commitments." Sandleris's goal was to generate certainty.
The net reserves of the monetary authority rise to more than $ 15 billion and are sufficient to cover all Letes payments and the remaining maturities until the end of the year . On the market, there is virtually no bond maturity until December and the Letes, if not renewed, would involve a disbursement of less than $ 7 billion. The currencies are sufficient to meet the deadlines even if the disbursements of the Monetary Fund for about 6 billion euros until December are not part of the reserves.
Next year, the situation is a bit more complicated. Interest and principal payments in the form of bonds with the private sector are calculated for $ 10 billion. The figure is not inaccessible. To make a comparison this year, it is estimated that the trade surplus in the foreign exchange balance is around $ 15 billion. Of course, measures are needed to recover the dollars and keep them in the domestic market. The combination of withholding tax and the obligation to accelerate the settlement of exports should be hand tools in 2020.