Counted on liqui: How does the "dollar leak" work?

In times of restrictions, a shortcut always appears. In 2015 it was the "blue" dollar that was used as a way to obtain US bills, given the restrictions imposed by the government of Cristina Kirchner. Now, given the impossibility of turning "green money" abroad, the companies appeal to "counted with liqui". But how does this new parallel dollar work?

It is an operation through which a company buys in our country shares or debt securities quoted in dollars, turns them abroad and then sells them, making the currency. The "step by step" operation is as follows:

1. A company buys stocks or securities in the local market, in pesos, but that are quoted abroad in dollars, since the same title or share can be quoted on the Argentine Stock Exchange and on some foreign Stock Exchange.

2. The company asks the bank with which it operates to transfer the title to a bank account abroad.

3. Once the transfer is made, the holder of the title sells it in the foreign market and receives a dollar deposit in exchange for the transaction.

4. Money is deposited in dollars abroad. That way companies manage to jump the restriction.

The price of the "counted with Liqui" or "dollar leak", as it is told in the City, depends on supply and demand. In the last weeks, after the announcement of the restrictions to the exchange market, numerous companies, either to face external obligations or to divide dividends despite the prohibition of the Government, turned to the purchase of titles and shares, which increased their value and raised the Buenos Aires bag. In parallel, some Argentine shares abroad showed losses, since there was an excess of supply to get rid of the shares in exchange for dollars.

Is the procedure legal?

In 2015, before a similar scenario, the Office of the Prosecutor of Economic Crime and Money Laundering (Procelac) filed a complaint with the Supreme Court, in which he denounced the BBVA French bank for the use of "cash with liqui". The Supreme Court rejected the requirement.

In this specific case, the Procelac did not question the legality of the operation, but instead pointed out that particular entity for its "abusive use". (DIB)