Week begins with sales US$31.1 million away from reaching June figure
The dollar for savings scheme is set to break a new record this week. That much seems certain considering that the week begins with the amount of dollar sales this month at six percentage points from reaching the level of June — the month with the highest sales since the programme was instituted.
Expectations, meanwhile, remain high over the “blue” dollar rate and the blue-chip swap, after a week that saw high demand amid rumours, raids and inspections.
The first two weeks of the month saw a 30 percent increase in the demand of dollars for savings than the same week last month, according to AFIP statistics bureau. While in June, US$512.9 million were sold, so far this month US$481.8 million have been sold. If the growing trend continues, as experts believe, July will become the month with the highest sales of dollars for savings.
About 680,000 transactions were carried out in the first two weeks of the month, 87 percent of the total transactions that were carried out in June. The demand peaked in the first week of the month, which analysts quickly explained by the half-year bonus and an increase in purchasing- power due to wage negotiations. On June 1 US$87 million were sold, followed by US$76 million on June 2, US$52.6 million on June 3, U$43.9 million on June 6, US$40.7 million on June 7, US$36 million on June 8 and US$29.5 million on June 10.
Last week also experienced high demand, with US$23.3 million on Monday, US$26.5 million on Tuesday, US$25.5 million on Wednesday, US$22.6 million on Thursday and US$20.6 million on Friday, accumulating US$118.6 million, a 23 percent increase from the same week last month.
Since the scheme was implemented in January last year, more than US$6.3 billion have been sold through 9,640,073 transactions. The demand has grown almost every month since then. So far this year 90 percent (US$2.8 billion) of the amount sold in 2014 (US$2.5 billion) has been exchanged. More than US$456 million were sold in January, US$462.9 million in February, US$485.5 million in March, US$495.5 in April, US$443.3 million in May and US$512.9 million in June.
Despite the high numbers, it did not have a significant effect on the Central Bank’s foreign-currency reserves thanks to the dollars brought in due to the harvest season. The monetary authority’s reserves now total US$33.846 billion, accumulating a US$18 million growth so far this month after an increase of US$16 million last week.
Blue-dollar expectation
With the primaries (PASO) in August for the presidential election now closer, the “blue” dollar started last week a growing trend and reached its highest value so far this year. The increase was followed by the blue-chip swap but not by the official dollar, which continues to devalue at a slower pace by an average half a cent per day.
The “blue” or illegal dollar ended the week at 14.22 pesos, accumulating a 60-cent increase — or 4.4 percent — growth last week. Meanwhile, the official dollar closed on Friday at 9.16 to the dollar bringing the gap between both currencies to 55.2 percent.
The illegal dollar exchange rate was pushed upward by new raids and controls in underground exchange houses and rumours over supposed new regulations of the blue-chip swap, which rose eight cents last week and closed at 13.34 pesos. All these factors limited the offer of illegal dollars amid a higher demand.
The Supreme Court rejected last week a request of the Office of Economic Crime and Money Laundering (Procelac) to ban the blue-chip swap, a move that led to a growth of the “blue” dollar. Procelac head Carlos Gonella criticized the justices and while he said he didn’t consider the blue-chip swap illegal, he said it can be used “to break other rules,” referring to the foreign currency controls.
The blue-chip dollar market, in its different variants, is a mechanism through which investors buy and sell dollar-denominated bonds in the exchange markets, frequently with the goal of moving currency in and out of the country at prices above those established by the Central Bank, and also to obtain dollars to supply currency peddlers in downtown Buenos Aires.
Legally speaking, the blue-chip dollar market is a grey area, as the transactions do not violate the law per se, but are frequently used to evade government regulations, an argument used by Gonella when filing the request to the Supreme Court.
Central Bank head Alejandro Vanoli denied any changes in the blue-chip swap last week or any additional monetary restrictions but at the same time rejected any possibility of lifting the currency controls already put in place.
Herald staff
Source: Buenos Aires Herald