In Buenos Aires banks and exchange houses, the AR peso’s US exchange rate started off the month at AR $15.74. As a whole, April saw a seven cent increase in the exchange rate. Federico Sturzenegger, president of Banco Central (BCRA), credits the bank’s announcement to purchase reserves of the foreign exchange for last month’s relative stability.
Sturzenegger announced two weeks ago, “We propose a more aggressive goal in the accumulation of reserves than what we had last year.” But just one day after the release, the exchange rate rose to AR $15.72 to the dollar, a jump of 16 cents.
BCRA mitigated the leap, however, by increasing the monthly rate of short-term debt securities (LEBAC) from 22.25 percent to 24.25 percent. This increased the return of the debts by 200 points in relation to March, reducing the impact of the 16 cent spike. Besides gains for security holders, the Single Market and Free Exchange responded positively, setting a record volume of US 684 million dollars.
The end of the month’s exchange, fluctuated in a typical fashion given monthly closings. At the beginning of the Friday exchange session, buyers hedged, making more protective purchases by holding the dollar higher than the day before. However, by the end of the session the costs had diminished, indicating less of a dependency on the foreign exchange.
To be exact, the Friday’s exchange started off with major purchase orders, which caused a bump in price to AR $15,456. When supply was replenished, diluting the buyer’s demand, the exchange rate hit the day’s minimum of AR $15,415 in the last hour of trade.
According to financial analyst Gustavo Quintana, “The last [exchange] of April did not reflect a significant variation in the price of the dollar despite the movements of the last days, which could barely experience a minimum increase in respect to the previous month. The recuperation of the currency prices appears very slow and fails to return to the levels of last December, reflection until now a negative development that was not anticipated by market analysts.”
Besides the official markets in Buenos Aires, the blue dollar market rose a penny to AR $15.99 in April, then dropped four cents on Friday (according to a survey in Microcentro). Similarly, the contado con liqui fell six cents over the month to $15.45, half of which fell on Friday. Finally, the bolsa dollar increased by five cents to $15.47.
The Rofex future’s market, which traded US $517 million, settled 40 percent for May, a total of US $15,649 with an implicit rate of 17.9 percent TNA. For perspective, the longest term was January this year, with a total investment of US $17,875 with rates of 21.1 percent TNA. Since January, each terms has fallen an average of six cents.
The international reserves of the Central Bank declined by US 251 million, leaving about US 48.209 million.