Giuliana Iglesias 
Almost two months have passed since the government made the surprising announcement that it would sell dollars to lower parallel dollar rates. The goal remains the same since December 2023: keep parallel exchange rates in check in order to lower inflation, until monthly variations are similar to the 2% crawling peg of the official market.
The Central Bank recently revealed that it used US$326 million in the second half of July to intervene in the financial (MEP) and blue chip swap (CCL) exchange rates. It is important to remember that, at the time, the gap between the official and blue dollar rates was at its widest this year, 62%, while the gap with the CCL was close to 55%.
The measure was the beginning of what the government has called “Phase 2,” which entailed selling foreign currency in the foreign exchange market to absorb monetary emission coming from Central Bank dollar purchases, in a context of reserve scarcity. The announcement was met with distrust, a first for the economic team. The market “punished” the government for its lack of clarity and for issuing policies reminiscent of the previous administration.
Was the intervention too severe?
According to PPI consultancy, the amount was higher than expected (US$290 million). “What is striking is that the Central Bank had to resort to this mechanism in a month that saw more export liquidation than previous ones. That is to say, there was a greater supply via the financial market thanks to the 80/20% blend. Exports of goods rose from US$4.9 billion to US$5.9 billion in July, meaning there was US$1.2 billion supply in the MEP/CCL exchange markets compared to June,” they explained.
The property developer Consultatio wrote in a recent report: “The announcement, meant as an additional measure within the new monetary scheme, has so far resulted in a reserve loss of more than US$500 million. It also caused CCL volatility to plummet to levels similar to those registered in the run-up to the 2021 legislative elections.”
“This trend has intensified over the last week and government intervention reached an average of US$30 million per day. In a context in which other emerging currencies added additional pressure (the Brazilian real depreciated 2.4% over the last five days), the CCL remained on the sidelines and almost unchanged despite registering record correlation with the currency of its main trading partner,” they warned.
A recent report by consulting firm IERAL likewise highlighted that more than US$530 million were used to intervene in the exchange rate gap from the beginning of Phase 2 until August 26. The amount seems minor compared with the US$2.7 billion and the US$7.6 billion former Economy Ministers Martín Guzmán and Sergio Massa, respectively, destined for the same purpose, according to EcoGo.
Will the Central Bank continue to intervene?
One of the unknowns is what will happen in terms of reserves this month. In principle, the two main factors that will allow it to have cards in its favor are the capital amnesty and lower energy imports. This will allow the Central Bank to manage its resources in a context which, as is already known, is seasonally unfavorable.
When asked by Herald sister publication Ámbito, financial advisor Fernando Villar projected that the amount may vary, but intervention is expected to remain stable during September. For PPI, meanwhile, the Central Bank may extend its buying streak.
According to consulting firm FyMA’s outlook, the CCL dollar is expected to be calm, due to the offer of the capital amnesty and the payment of asset taxes. “In addition, the Central Bank still has a billion dollars to intervene if it wishes to do so”, they pointed out.
