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Dollar deposits increased by USD 3 billion since Milei took office: how it impacts reserves - Infobae
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Los depósitos en dólares aumentaron en USD 3.000 millones desde que asumió Milei: cómo impacta en las reservas
Las colocaciones del sector privado en efectivo crecieron 21% en poco más de cuatro meses y superaron los USD 17.000 millones por primera vez desde septiembre de 2020
www.infobae.com
April 18, 2024
Private sector cash placements grew 21% in just over four months and exceeded USD 17 billion for the first time since September 2020
By Juan Gasalla
40% of the BCRA's reserves are made up of private deposits. (Illustrative Image Infobae)
Hand in hand with consistent exchange rate stability, greater confidence of savers in economic policy and the expectation of a prompt elimination of the “trapped stocks”, in recent months a rapid recovery of the stock of deposits in dollars has been observed .
Cash placements in dollars from the private sector increased since December 10, when Javier Milei 's government took office , by about USD 2,961 million or 21% , from USD 14,126 million to USD 17,087 million on April 15, last available data. It must be emphasized that this figure is still half of the record of USD 32,499 million of August 9, 2019, the PASO price of that year, the result of which unleashed an accelerated withdrawal of cash from the banks.
In this way, private deposits in foreign currency recovered their highest level since September 21, 2020.
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In any case, the amount of dollars that Argentine savers keep in accounts in the local financial system is only a minimal part of the amount of cash currency stored .
According to the latest report on the Balance of Payments, international investment position and external debt released by INDEC at the end of March, at the end of the fourth quarter of 2023, the holding of dollars in cash in the hands of Argentines totaled USD 275,471 million ; Only 6.2% was deposited in demand accounts in Argentine banks .
The improvement in the stock of deposits also contributes to shoring up the Central Bank's international reserves . It happens that in the accounting of the entity's gross stock of assets, most of these placements are considered as reserves for reserve requirements. The participation of deposits in reserves derives from subtracting from this amount the stock of dollar loans granted by banks.
On December 7, before Milei was sworn in -and Santiago Bausili assumed the presidency of the Central Bank-, these reserves reached USD 10,510 million (private deposits for USD 14,126 million, against loans to the private sector for USD 3,616 million) , while on April 12 they increased to USD 11,763 million (deposits for USD 17,087 million versus loans for USD 5,324 million).
Therefore, with the La Liberad Avanza government, the contribution of reserve requirements in reserves contributed USD 1,253 million in just over four months, that is, 15.2% of the USD 8,258 million that international assets grew, from USD 21,208 million from December 7 to 29,466 million dollars.
Gross reserves and net reserves
Given that this portion of reserves (today USD 11,763 million or 39.9% of the total ) is made up of private deposits, many economists consider that they should not be counted as BCRA assets. At the same time, they consider it more genuine to account for net reserves , ignoring deposits and loans.These net reserves, around USD 11,000 million negative when assuming the management of Milei, are now close to reaching zero, as a result of the recent recovery based on intensive purchases by the Central in the cash segment of the wholesale market, with USD 13,813 million absorbed since Monday, December 11.
Source: Profit Consultants.
“ Net reserves are just reaching zero . Although we have the liquidation of the coarse harvest ahead, there are many maturities in dollars in the next four months: IMF, Bonares and Globales, Bopreal and payments to international organizations add up to USD 7.4 billion,” commented Amílcar Collante , economist at CeSur (Centro of Economic Studies of the South).
In this regard, the Central Bank highlighted among the “exchange balance factors” the sustained accumulation of international reserves and stated that “as of December 10, 2023, the BCRA has been able to purchase steadily in the MLC, reversing the previous trend of 2023. in which net international reserves fell by USD 23.4 billion. These purchases contribute to an accumulation of net international reserves of USD 8.7 billion at the end of the first quarter of 2024 (IMF target methodology) since that date.”
