BCRA Reserves are in at $ 66,413 million, and by the middle of March, the fourth tranche of the IMF loan would be USD 11,000 million. That way, we would get a huge number to about $ 77,000 million.
Monetary base today amounts to $ 1,367,319 million, and if we add debt to Leliq, passes and other assets amount to $ 2,186,682 million.
The total debt of BCRAs, including Leliq, goes to other assets, amounts to USD 823,245 million, corresponding to USD 22,164 million and represents 33.4% of the reserves.
With those numbers in hand we can say that BCRA is on its way to slow down the dollar for a long time. The government's experience is to do the same as it was in 2017.
The government's strategy will be to strive to accumulate as many reserves as possible without the expansion of the monetary base this year. In 2017, Lebac pushed the crowd out into the public hands, and this time they will be absorbed into the hands of banks through Leliq, which gives them more predictability. If entities want to abandon these assets, it is more likely that the Central Bank will force them to increase the required reserve.
Starting from February, there is a reduction in the reserve requirement, which would make more money in the economy, as it would spread cash flow, but does not change the overall monetary base (monetary base is the same as circulation and reserve requirement).
It is a big question as BCRA will do when it buys $ 700 million that the IMF allows to buy by extending the monetary base.
In 2017, in order not to expand the monetary base, it absorbed the pigs over Lebca, in January that year the stock of Lebaca amounted to $ 595,379 million, and in October it amounted to $ 1,040,035 million. Measured in dollars, it has surpassed US $ 37,421 million to a debt of US $ 58,859 million, representing 113.6% of the reserve.
By 2019, we will have to closely monitor the stock of the central bank's current and available reserves. Any increase in debt to levels above 40% reserves will turn yellow, and when it reaches 50% level, the market will start massive portfolio of dollarization processes.
In short, it is vitally important to keep track of the ratio of Central Bank debt to all reserves. This relationship will be very favorable in the first half of the year, but in the second half of the year IMF payments will be less. The government will have to sell dollars in order to clean up payments in parts, which would accelerate the portfolio's dollarization due to proximity to the election, and all this could lead to a fall in reserves and greater central bank debt.
To the extent that the Government recovers the ability to access voluntary credit markets, either by collecting debts in dollars or dollars, on domestic or foreign markets, the problems of eventual rise in the exchange rate will increase. but If you can not get it financing, while at the same time an unwanted event occurs on world markets, the likelihood of a low scenario for dollar disappears.
The government is trying to repeat the 2017 experience. If world markets and election results follow, it can have a happy ending. The result of this policy would be recorded in 2020 when something similar to what happened in 2018 could occur. If world markets are not followed and the election process is very close, it is highly likely that US dollarization will lead to a high volatility scenario for the second semester.
What we want to emphasize is that, despite the low-dollar summer, the vulnerability of the system is very high. Man is the only animal that hits twice on the same stone. This phrase fits perfectly in this government.
(*) Economic and financial analyst