Giuliana Iglesias 
As of Wednesday, small and medium businesses are allowed to buy dollars in the official exchange market to pay debts with foreign suppliers.
Through March 9, 10,000 SMEs with debts of up to US$500,000 will be able to access dollars through a schedule established by the Economy Ministry.
The measure has been welcomed by small businesses — but has sparked questions about its possible impact on the Central Bank’s delicate reserves.
During the second stage, starting March 10, SMEs will be able to purchase up to US$100,000. After April 10, when the government is expecting an influx of dollars from the grain harvest, they will have access to dollars to pay the remainder of their commercial debts.
The Central Bank made the decision days ago as demand for series 1 BOPREAL bonds improved, mostly from big businesses. Designed for importers who owe money to suppliers, the bond is obtained in pesos and commits them to paying in dollars in future.
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Official data show that 5,100 of the 10,000 companies that can access the official exchange market are micro-enterprises, nearly 3,900 are small businesses, and 1,000 are medium-sized. That accounts for almost 80% of SMEs and over 70% of registered companies, according to the Central Bank.
The Central Bank also announced that the remaining SMEs with trade debts of over US$500,000 will have priority access to the short-term bond Bopreal series 2, with an amortization flow in dollars between July 2024 and June 2025.
While demand for series 1 bonds is gathering pace, the market has doubts about series 2. A total of 349 bids were received for a lower amount than expected — around US$271 million, placing 54% of the US$500 million offer.
Central Bank dollar purchases
The other factor at play is the Central Bank’s purchases, which are inspiring greater confidence. On Wednesday, the first day of this “open tab” for the sector, the institution bought US$255 million. It has accumulated over US$1 billion this month and US$7.2 billion since Milei took power. However, some analysts believe reserves are still below the figure inherited from the previous administration, with a negative balance of US$12 billion. The situation gives some room for calm, although not enough to relax completely.
“Demand for official-rate dollars will increase. Therefore, if the Central Bank doesn’t buy in the official exchange market, they will switch to a selling position and start to lose reserves,” said economist Federico Glustein.
“By starting with a maximum of US$50,000 per company, the drop will be a maximum of US$500 million at once, although it will probably be pro rated because not all SMEs can access that amount starting today. If the Central Bank maintains their daily operations from last week, they will have no surprises, although we still need to consider the big companies that carry most of the commercial debt,” he added.
Alfredo Romano of financial consultancy Romano Group said that private access “is increasing and the offer is relatively stable.”
“Private access is progressively increasing, not fast, but it’s increasing,” said Salvador Vitelli, from the same company. “Foreign currency offer for exporters is still relatively stable despite this exchange rate depreciation, which is the result of a ‘blend’ dollar that gives them a real exchange rate that is more competitive than the official rate in net terms.”
He also points out two elements that moderate the impact on Central Bank reserves: private demand is not excessive, and the supply is still present.
Private demand grows
However, Vitelli warns that “it would be logical to see this supply decrease due to the higher inflation we had starting in December. That’s putting pressure on the exchange rate. Logically, it’s losing competitiveness, leaving fewer incentives for exporters to liquidate and therefore greater incentives for importers to demand foreign currency.”
He believes the payment schedule established by the Central Bank is beneficial for now. “We can gradually expect higher levels of demand as long as there is a greater offer of dollars,” he said.
SMEs have welcomed the measure, claiming it will help “decompress” companies’ financial situation amid a biting recession. They also feel that it mostly benefits industrial SMEs, including the all-important auto industry.
