Official, blue, stock market, counted on liqui: what can happen with the gap between the different exchange rates – 09/14/2019

Once again the dollar changes its skin in Argentina and assumes different forms. Blue, MEP, CCL are expressions that drip from financial jargon into the popular language. The parallel dollar forms are developing Your own crack with the official quote. Today, the gap moves around 25%, but analysts point out that if the drop in reserves persists and more controls are applied, That distance could be increased.

On September 1 the Central Bank established that individual savers will be able to acquire Up to US $ 10,000 per month. Companies and institutional investors will no longer be able to buy currencies in the official market for treasury and will only be able to access this exchange rate for foreign trade operations or to pay off debt.

With these restrictions they took force other legal ways to buy dollars that allow to jump the barrier and to treasure more than the allowed thing or to turn currencies abroad. Through the “counted with liqui” (CCL), investors buy Argentine assets in pesos, turn them abroad and liquidate them in the international market to get the dollars. This operation is the one chosen by those who seek to take out the currencies of the country in fear that the restrictions will become stronger. Doing this operation implies Pay the dollar 25% more expensive.

The other option than over the end of last week began to go extinct is the dollar "rulo" or MEP, by the initials of the Electronic Payment Market. To make the loop, the investor bought dollars and with them bought a bond – the most used was Bonar 24 (AY24) – and then sold it by charging it in pesos. The difference between the official dollar and the dollar bag left a gain of up to 7% in a single day. But as this operation became popular and small savers flooded stock traders with orders, that profit was limited. Anyway, the fury for the AY24 caused the operations in this bond to pass from 7,500 to 75,000 overnight.

To lower the fever, the Central on the one hand and the National Securities Commission (CNV) on the other made resolutions to “smooth the curl”. The Central established last Wednesday that whoever buys dollars you must keep them for five business days before using them to buy bonds or stocks. And on Thursday, the CNV did its part and established that to buy bonds with these dollars there will be a period of 48 hours for settlement of the securities and also the holder must keep them for a minimum of five business days before transforming them into pesos. This makes the operation from end to end requires 12 business days, which makes it very risky in an unstable market like Argentina.

“In 12 business days, the price risk that exists is very high. With these measures this roller operation is discouraged”, Says Nery Persichini, manager of GMA Capital.

On Friday the official dollar traded at $ 56.10 in the wholesale, $ 58.40 in the retailer, $ 67.50 in the MEP, $ 70.30 in the CCL and $ 61.50 in the blue. The gap between the official wholesale dollar and the MEP is 20%; that of the CCL, of 25%; and that of blue, 5% in the retailer. In all three cases it is the largest gap since the restrictions began. On September 3 the gap was 1.8%, 5.3% and 2%, respectively.

Why does the MEP continue to rise with respect to the officer if the roll is already inconvenient? Persichini's explanation is that the MEP goes up because with the new restrictions there are fewer operations. “What lowered the MEP gap was the offer of retailers. The 'rulers' sold bonds against the MEP dollar and that is the dollar bought by those who make CCL. When the curl is discouraged, there are no more bidders and then the gap between the MEP and the CCL is narrowed. ”

With this operation, at the beginning of the roll you could earn $ 40,000 every $ 10,000. “This week the difference narrowed because it began to become popular. It was 10 days of this fever. ” For the analyst, “in a context of restrictions and with the expectation that this could be the first step towards greater controls, it makes sense what is happening with the gaps. ”

Will this crack continue to grow? In the stocks that were applied between 2011 and 2015, 20% was the floor of the gap and the ceiling became 80%, in a context in which the official dollar was very late. “In the short term I don't see the gap at 80% as in the previous stocks, but if there are more restrictions, the immediate consequence will be a bigger gap. If financial conditions do not improve, there are likely to be greater restrictions to take care of reserve dollars. You have to see what happens from here to the elections, ”says Persichini. "For now I see no risk of the parallel dollar impacting prices. For the tradable ones and for the basic basket the dollar is the official one ”.

For Gustavo Neffa, Research for Traders manager, “The more restrictions they put on, the more they will go looking for that merchandise. The gap, instead of closing, can only increase because controls increase. Now that the curl was cut, there is less demand, but the price is maintained because the restrictions remain. ”

“Here the loop was over because the savers are transferring the risk of being in the market for 7 business days. There is no longer arbitration. That concept died; today is pure risk ”, remarks Neffa.

It also points out that this scenario “Can increase the demand on blue" The ticket offered by the trees in the vicinity of Florida sold Friday for $ 61.50. “Blue doesn't take off anymore because so far the restrictions are low. But if this is not enough to control the exchange rate, all the necessary tools will be applied. If you adjust the dollar cap to buy and get below US $ 10,000, the gap will grow" In this context of uncertainty, Neffa emphasizes that banks are liquid. “The system is capitalized, deposits are much higher than those of 2014/15. There are no reasons to be leaving the financial system. ”

LGP