November 27, 2014
BCRA buys US$110M as reserves edge up
A day after it purchased US$150 million, the Central Bank yesterday bought US$110 million on the foreign exchange market, in two days of heavy trading after a relatively quiet few days last week for the monetary authority.
The purchase had a positive effect on foreign-currency reserves, which rose US$51 million to close at US$29.071 billion, despite a US$70-million payment being made for energy imports.
The significant dollar-purchase by the Central Bank helped keep the official dollar stable at 8.15 pesos in banks and exchange houses. On the other hand, the “blue” or illegal dollar rose 10 cents and closed at 12.05 pesos. Due to that increase, the gap between the two rates reached 49.70 percent yesterday.
The monetary authority was able to buy dollars on Tuesday and yesterday in large part because grain exporters brought in more dollars than last week, when many put sales on pause after the US Supreme Court declined to hear Argentina’s appeal in its long-term legal battle against hedge funds that have refused to restructure defaulted sovereign debt.
“Many more dollars were brought in over the last few days by grain exporters. After the Supreme Court decision, they decreased sales in order to see what would happen,” market sources told the Herald yesterday. “At the same time, the call money rate is quite high and so they are taking advantage of that.” Call money is the interest rate banks charge to brokers for short-term loans.
Grain export firms grouped under the CIARA and CEC chambers, which represent a third of the sector, have settled US$12.345 billion so far this year. In the last report for the week ending on June 23, firms reported to have brought in US$451.420 million, much lower than the US$583.121 million reported between June 9 to June 13.
Last month, the head of the Central Bank Juan Carlos Fábrega said reserves will remain stable and end the year at US$28 billion, while he estimated a record harvest of 108 million tons for this year and said only one third of it has already been sold. The harvest season is supposed to continue until the end of July but it could be extended due to the heavy rains that have delayed harvest.
The Merval benchmark stock index rose 0.88 percent yesterday and closed at 7,982 points with 150 million pesos traded.
Increases were seen in Banco Macro (4.14 percent), Siderar (2.47 percent) and Grupo Financiero Galicia (2.34 percent), while there were drops on Petrobras Brasil (2.86 percent) and IRSA (2.37 percent). So far this month the Merval has grown 3.50 percent and 48.10 percent this year.
Herald with DyN