March 11, 2014
Peso reaches 7.82 per US$
Reserves drop US$83 million to US$27.738 billion
The peso continued to strengthen against the wholesale US dollar yesterday, appreciating three cents to 7.82 pesos, thus consolidating a downward trend seen since the recent peak in devaluation to 8.02 pesos.
A strengthened peso did not equate in a second consecutive surging of Central Bank (BCRA) foreign reserves, however, with the latter losing US$83 million and closing at US$27.738 million yesterday.
The official exchange rate stood at 7.84 pesos yesterday, without including the 35-percent income tax surcharge that all those who buy the currency for savings must pay.
AFIP emphasized in a release yesterday that its criteria for the sale of greenbacks for savings purposes had not been changed, despite reports of people being authorized to buy less than the established 20 percent of their income in the second month since restrictions were loosened.
The self-employed were said to have been particularly affected, but the tax bureau emphasized that it has relevant, updated “information ... (with which it can) re-categorize self-employed (persons), or exclude them” from buying dollars.
The Central Bank’s (BCRA) intervention in the wholesale market and the recent upward swing in interest rates, which has made leaving funds in accounts and fixed-rate deposit schemes more tantalizing, led to a general strengthening of the peso in all its varieties. The rate of the BADLAR average of fixed-rate deposits above one million pesos currently stands at 25.5 percent, for instance, which is relatively close to inflation.
Economist Germán Fermo wrote on his blog that “interest rates have to rise more,”also warning, however, that “without structural reforms, the economy will cool down and there will be a quasi-fiscal deficit.”
On the black market, the so-called “blue” dollar plunged 65 cents to 11.50 pesos, the first time the illicit rate has dropped under the 12-peso mark in two weeks.
The troublesome gap between the two rates was thus reduced to 2.68 pesos, as BCRA Governor Juan Carlos Fábrega’s bid to lure business away from the illicit market received a confidence boost.
Last week, the BCRA announced that banks will only be able to hold up to 30 percent of their assets in dollars from April onward, meaning they have to sell about US$4 billion. A 10-percent ceiling was also placed on the futures currency market.
Herald staff with DyN