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Expectation: Define the BCRA strategy for February

This was already anticipated by President of BCRA Guido Sandleris during his stay in Davos, when he pointed out that he analyzed the increase in foreign currency buying quotas in order to provide the agency with a higher margin in interventions on the foreign exchange market. Recall that in the last decision of the Monetary Policy Committee (COPOM) it was resolved that if the exchange rate below the noninvasive zone, which is growing at a rate of 2% per month, the basic objective of this increase will be to increase by daily purchases of up to USD 50 million through the auction of BCRA- (the amount was reduced from $ 150 million), without exceeding 2% of the target in the accumulated month, which could be checked during January. If it is above that area, the target would be reduced with the sale of the agency to $ 150 million.

In this regard, Mauro Mazza, stockbrokers, said that "The Central Bank must be ready for liquidation of gross proceeds, 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% annually, or 1.3% per month". Mazza considered that "there is a certain margin to lower teaching rates, but BCRA will keep a certain precaution to avoid mistakes in the past." In negotiations with the international body last year, the ruling party also pledged to prevent re-growth in the exchange rate, explaining why a float band was growing at a rate similar to inflation. Although the weight has appreciated over the past few weeks, it still remains at high levels after the devaluation in 2018. Despite the various purchases of BCRA ($ 510 million a month) and the continued decline in the Leliq rate, the wholesale dollar traded seven days in a row under " zones ".

The fact is that between Wednesday and yesterday, the Leliq rate accumulated two consecutive losses of 142.5 basis points (yesterday closed at 54.89%). LBO Inversiones said that "these falls were accompanied by large extensions by BCRA and seemed to be of some concern for a moment as they could put some pressure under a contract in February if they were very close to the moon." However, they emphasized that the monetary authority "increased its presence in another instrument: bank passages, which are transactions between banks and BCRAs, in which they are formerly lending money for the last day, thereby reducing the monetary base." And they explained that "the pass rate (44.2% yesterday) was lower than the rate of Leliq, so now the banks that were left out at the auction of BCRA were faced with a lower rate alternative." "This should increase the competitiveness of their proposals in the benchmark bid, which could be the bear's argument for that rate," they added. And this could have a correlation in the price of the course.

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