“Rain” of dollars, “laundering” and the end of the “traps” in Argentina?

( Spanish) — The Argentine government found a source of dollars in the asset regulation regime, the first stage of which has ended with an increase.

The amount earned so far represents a greater monetary contribution than other sectors usually make. The “laundering” (as the regime is known) generated US$11.9 billion until the last day of September, according to the Central Bank of the Argentine Republic (BCRA).

Regulated in July of this year, the measure allows money not declared until now to be regularized at no cost, as long as it does not exceed US$ 100,000 and the resources are kept in the financial system until December 31, 2025 or invested in different ways. ways established by the Ministry of Economy.

This, which allows the government better control of the different quotes of the US currency, is a “rain of dollars” if compared, for example, with foreign trade statistics, the main source of this currency that Argentina has.

• Dollarization is quite far away for Argentina, says expert

Although it is true that the total accumulated by exports so far this year exceeds that received from “laundering”, it is also true that the country has obtained more dollars from this regime than in the individual relationship with each of the nations with which it trades. For example: Argentina made sales to Brazil, its main trading partner, for a total of US$8,512 million until August. To its second destination market, China, it was US$ 4,598 million. While to the United States, its third most important partner, it added US$ 4,113 million.

Not all the money that comes in through “laundering” is going to enrich the Central Bank’s reserves. According to specialists, the proportion is that 3 of every 10 dollars that come in through this regime go to reserves for fines or reserves. This means that, beyond the good pace of “laundering”, it is not enough to generate predictability on the external front and, thus, move forward with key measures to end exchange restrictions, for example.

And the “trap”?

The authorities have not set a definitive end date for the exchange restrictions that have existed since the end of 2019 for the free transaction of currencies through the Single and Free Exchange Market (MULC). When asked by analysts and journalists, officials do not give details or estimated deadlines.

The government has shown signs of wanting to regularize the exchange situation. Last week, it made this limit more flexible (known as “cepo”), but only for service exporters. In a statement, the BCRA extended the period for the entry of foreign currency for this collection from five to 20 days.

What conditions should be met for a total opening? Economist Nicolás Litvinoff, director of Estudinero.org, maintains that “the economic team has some numbers in mind to be able to release the exchange rate ‘trap’, without repeating the negative experience that Mauricio Macri’s government had, when it was released earlier. of time and then they had to re-implement it.”

According to the expert, the government must consider indicators such as the volume of the BCRA’s international reserves, the primary fiscal deficit and the current account surplus.

“To put it in numbers, we could say that the net reserves should be between US$ 25,000 and 30,000 million, to have them available and to serve as a cushion to face an initial demand for dollars after the liberalization of the exchange market,” he says.

He also underlines the importance of inflation being below 20% annually, that is, less than 2% monthly, “so that the government knows that it can free the exchange rate without that inflationary pressure that makes investors or people In general, they seek refuge in the dollar to maintain purchasing power.”

Litvinoff agrees with the majority of specialists, who maintain that it is key to have a surplus from the external sector as a sign that the exchange rate can remain at the values ​​stipulated by the government.

“A current account surplus of the order of 1 to 2% of GDP, at least, is needed, and that can be achieved with export growth,” he says.

Economists such as Ricardo Arriazu, Gustavo Cañonero and Rafael Di Tella, summoned by the BCRA, advised this week to move towards a gradual lifting of the “stock”, but without this implying a devaluation, as other sectors propose in the face of an exchange rate that evolved by behind inflation so far this year.

At the same time, dollar deposits are in good health. They surpassed the balance of the “laundering” of 2016 and prepare a scenario for the normalization of the exchange market in Argentina.

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