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Expectation: define the BCRA strategy for February

This measure was already anticipated by the president of the BCRA, Guido Sandleris, during his stay in Davos, when he indicated that he was analyzing the expansion of the quota for the purchase of foreign currency in order to give the agency a greater margin in interventions in the foreign exchange market. It is worth remembering that in the last decision of the Monetary Policy Committee (COPOM) it was decided that if the exchange rate is below the zone of non-intervention, which grows at a rate of 2% per month, the basic goal is to increase with daily purchases to 50 million. Doll. USA through BCRA auctions (the amount was reduced from $ 150 million. USA), not exceeding 2% of the target indicator in the cumulative month, which can be checked throughout January. In case it is located above the area, the goal will be reduced along with sales to $ 150 million made by the agency.

In this line, Mauro Mazza, Bull Market Brokers, said that "The central bank must be prepared to eliminate the gross levy, because $ 50 million a day is not enough." In addition, he recalled that "the government agreed with the IMF to maintain a positive real rate of 15.7% on an annualized basis, that is, 1.3% per month." Mazza believed that "there is some margin so that rates continue to fall, but the BCRA will maintain some caution to avoid past mistakes." In the course of negotiations with an international body last year, the ruling party also undertook to prevent a re-appreciation of the exchange rate, which explains why a floating band was introduced, which is growing at a rate similar to inflation. Although the peso rate has risen in recent weeks, it still remains high after the devaluation of 2018. And despite the various purchases of the BCRA (in the amount of $ 510 million per month) and the steady decline in Lelik rates, the wholesale dollar has been trading for seven days in a row below the “zone”.

It should be borne in mind that from Tuesday to yesterday, the Leliq rate accumulated two consecutive losses of 142.5 basis points (yesterday the closing price was 54.89%). From LBO, Inversiones said that "these declines were accompanied by large expansions of the BCRA and for a moment seemed to cause some concern because they could put some pressure on the contract in February if they were very tough for the purpose of the month", but they stressed that monetary regulation "has increased its presence in another instrument: banking operations, which are transactions between banks and BCRA, in which the former lend money last for one day, thereby reducing the monetary base." And they explained that "the pass rate (yesterday at 44.2%) is lower than that of Leliq, so now the banks that were excluded from the BCRA auction faced an alternative to a lower rate." "This should increase the competitiveness of their proposals for the base rate rates, which can be a bearish argument for this rate," they added. And this may be related to the price of the exchange rate.

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