During the last week of the Monetary Fund technical team visit, Central Bank was facing its first test since it had implemented, after agreeing with the financial institution, the exchange scheme between the bands. New demand for the dollar led him to be more than $ 41 and forced the financial authority to act with an intervention of Leliq rate reduction, first, and then raise it almost 50%.
Argentine assets had financial "veranito" – not only bonds and stocks but also the pressure- began to cool about ten days ago when the January inflation figure was worse than expected, surprised by the market.
At that time, purchases of dollars increased and the price was reheated, even close to the downstream zone. Without the possibility of making market purchases in the market, the BCRA's first response was interfere with reducing rates of Leliq's interest, which came to a sudden decline.
Last Wednesday, however, the US currency continued to rise and even touched, in its wholesale variation, record price of $ 40.55 the average of that exchange wheel and a retailer over $ 41 on slate private banks.
At the time the leader Guido Sandleris decided appeal to both resources I was on hand: reinforce rate & rate Leliq's interest and acting in the market dollar for the future. Both measures aimed at preventing the demand for dollars and thereby ignoring a possible exchange rate alarm.
The following day the BCRA further strengthened the Leliq interest rate signal. He took from 46% to 49% and asked for this way to ensure that the dollarization is cooled as soon as possible. Already on Friday, Liquid Letters performance has risen again but at a lower rate, so they remain at a level close to 50%.
For economists, the inflation figure for January, of 2.9%, is one of the reasons why an explanation of demand for foreign currency is explained. In view of a higher price increase than expected, the interest rate of the Leliq (and, therefore, the fixed terms) They are less attractive because they allow a saving that earns less to inflation.
For that reason, the Central Bank decided to act through the higher Leliq rate. In recent days, financial institutions have begun to reduce deposits offered to depositors, with percentages of between 30 and 35 percent per year. The BCRA's response with a new rate hike could now transfer the fixed terms with a better product.
This Monday the dollar will open at $ 39.22, about eighty cents above the underside zone of the lower band. Central Bank signs in recent days think the analysts feel that the financial authority feels "more comfortable" with a kind of change closer to the floor from the center's float, and even smaller, of the highest domain.
The larger financial crunch used by the BCRA will mean that this week will expire a month with a fundamental financial goal (the key indicator of the current scheme) that will be oversubscribed. This increase in rates last week has resulted in increased absorbency of market pressures.