Business Closed caves, parking and gaps complicate dollarized savers urging...

Closed caves, parking and gaps complicate dollarized savers urging for pesos

With the hyper-dollarization of the Argentineans that occurred in the last two years, encouraged by the constant macroeconomic instability, which resulted in mega-devaluations of the peso, and consequent inflationary jumps, the savings for the vast majority of those who can accumulate surpluses were dyed from “green” to more not being able, before which the previous government had to restore the exchange clamp, which maintained the current administration of the president Alberto Fernández. Already with the coronavirus pandemic among us, and the uncertainty that this outbreak entails on different fronts, the time has come for many to begin pesifying a part of those dollars to “spend the winter” economically, which paradoxically went ahead in almost three months to the station itself. To do so, however, certain obstacles must be overcome.

On the one hand, Those habitats in the parallel exchange plaza are prevented from selling their holdings due to the general closure of the caves, due to the effect of the total and obligatory isolation provided by the Government. But, in addition, it is also not a good business to exchange currencies for pesos through the homebaking since, since the 30% COUNTRY tax was implemented last December, the gap between the purchase and sale prices of the exchange rate has been extremely wide: on average it reaches almost $ 25 ($ 61.61 / $ 86.59, according to Wednesday values). A third alternative is to sell the dollars in the Stock Market, through the purchase of a bond in hard currency, and the subsequent sale of the same title but in local currency, a transaction from which the so-called MEP dollar (Electronic Payment Market) arises. , or dollar Bag. Here, however, and in particular for natural persons (legal entities are excepted), one more obstacle appears: parking, or the obligation to maintain five business days in the client accounts (in which securities are deposited) those bonds acquired on the stock market, and after that period has elapsed, which brings with it a strong risk in the current highly volatile scenario, to be able to sell them and make pesos.

Caves out

Due to the obligatory quarantine, the caves that operate today were reduced to a very small group, beyond their eventual survival in hiding. “Some lowered their blinds because the flow of tourists was reduced to zero, in a Buenos Aires city that was left in ‘desert mode’, others closed because their owners are older people, and some more because banks do not work, where they usually go to the end of the day to deposit the currencies in safes ”, described an operator who knows the informal business closely. The truth is that such an exceptional situation caused some caves to be reconfigured, using the delivery channel as a momentary way out of the crisis. Of course, due to the risk that this modality entails, the spreads offered by those now called in the jargon “currencies already” are very wide, and in some cases they reach $ 10. For a couple of weeks, there has been no clear price reference in this segment, beyond the fact that they have tended to decline in recent days ($ 83.50, according to Wednesday’s price) after having touched $ 90, last 18 March, prior to the official announcement of the mandatory quarantine. With the limits that the pandemic brings in this market, and depending on the amount in question, “today many try to sell dollars to family and friends, at a slightly lower reference price,” says one operator.

Parking

In times of high exchange rate fluctuation, and when you could still buy US $ 10,000 per month and per person, the market regulatory authorities during the administration of Cambiemos decided to impose parking, in order to cut off certain financial operations ( called vip roller) that left strong profits in a matter of minutes. Basically, the transaction started from the purchase of dollars in the exchange market, with which bonds in hard currency were acquired, and then sold in their version in pesos, which generated a much higher exchange rate than the one I got in banks and exchange houses (because the exchange gap had been cleared by the stocks). In other words, cheap dollars were bought in the banks, and more expensive were sold in the stock market, to later carry out the same transaction again (hence the name of curl).

Already with the hard stocks, whose dollar purchase limit was reduced to $ 200 per month and per person, and with the entry into force of the 30% surcharge, voices disagreeing with the measure began to emerge in the market, as they lacked felt in a different context than where it had been implemented (light stocks), for encouraging business in the parallel market, and, consequently, for limiting the circulation of foreign exchange in the official financial circuit. They also object to the fact that the provision discourages investing foreign funds in Argentine assets, because it implies an implicit risk of keeping the bonds in the portfolio for five business days, at times of high stock market volatility. But the criticisms were accentuated with the current conjuncture, where the need to liquidate the dollars to face obligations in pesos was deepened (something that was evident in the prices of the MEP dollar and the “cash settlement”, which even came to operate for below the tourist dollar last week).

Faced with this scenario, less than a month ago the Stockbrokers Chamber made a formal claim before the National Securities Commission (CNV) and the Government to eliminate the parking. From there, and taking note of the rejection that it generates between operators and investors, added to the pressing economic context, the CNV is evaluating for these hours the elimination of the rule, which the Central Bank also intervenes in, as it deals with foreign exchange operations. “It is a subject that is under analysis,” but at the moment “there is nothing to communicate,” a source from the agency that commands Adrian Cosentino.

For José Echagüe, strategist Consultatio Investments, “maintaining the bond parking is a gigantic invitation to sell foreign currency through the parallel market, so that economic activity becomes even more informal. Has no sense. This decision, which was obsolete, must be reviewed ”.

For his part, Rafael Di Giorno, director of Proficio Investment, recalled that “parking is a measure that was taken at a specific juncture, but it was totally out of date. Today it is an obstacle that prevents people from using their savings in dollars to pay their bills in pesos. So you choose to go to the informal market or continue to postpone payments. ” And he finished: “The logical thing would be to remove it. It is a measure that was even implemented by the previous government, so there should not be a political cost to remove it either. ”

“Given the current situation, Argentina may need more than ever to raise dollars and that these circulate through the formal financial system, instead of the parallel market. In this sense, one of the best measures that the CNV could adopt is the elimination of parking, so as not to motivate savers to go in search of the blue dollar, “said Sergio Morales, director of Morales Inversiones.

Finally for Diego Martínez Burzaco, Global Investor economist, it is “a measure that has no reason to exist in the current context, with a fierce stocks and very great financial stress in the peso market.” He stressed that “the over-dollarization that existed at the time would be a very relevant source of financing at this time.” At the same time, he stated that “if there are investors who are willing to invest in Argentine assets, parking also discourages all that type of operation because it implies an implicit risk of staying in bonds for five business days when we know the volatility that the market is having today” .

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