From Lebac bomb to Leliq: a dynamizer of the Central Bank?



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In a medium-sized emerging country, the central bank is to ensure an offer of means of payment and credit in line with the expansion of the real economy and, at the same time, valuing a volume of international reserves to protect the local currency in which such means of payment and credit are expressed against the volatility of the global financial market. Currency and credit for the domestic market and stocks of intervention stocks that I will moderate the external flow.

Since the beginning of its management the national government went in the opposite direction, signed by the commercial and financial opening to a world in tensions, freeing the movement of currencies and predominance of the financial income through instruments issued by the regulatory body that guarantee a positive real interest rate in relation to the evolution of the exchange rate. High interest rate, free circulation of currencies and massive financial income in dollars. An explosive cocktail if any, especially in a world of high protectionism, the crisis of multilateralism and restrictions on international liquidity.

Sturzenegger, the first president of the BCRA, was dedicated to expanding the issuance of letters from the Central Bank (LEBAC) in the open market at levels that exceeded the monetary base. When the external crisis began, Caputo used the first IMF disbursement of $ 15 billion to facilitate the cancellation of the bulk of the LEBACs that had been issued by its predecessor and now Sandleris used half of the second disbursement of the multilateral body US $ 5,631 million to complete the payment of LEBACs that were outside the financial system. The rest of the letters were mandatorily handed over to the banks and became liquidity letters or LELIQ.

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The government commemorates the deactivation of the pump of financial instruments speculation that he created with his monetary policy, without measuring what it cost $ 17.7 billion of debt with the IMF in exchange for a painful fit plus an estimated loss of international reserves in $ 10 billion.

This tour is essential to know, in principle, if this policy of the Central Bank that promotes the financial recovery and the exit of capital was completed and, secondly, if the stability of the exchange between floating bands is sustainable.

It was said in previous columnsthat the Alliance change despite having achieved the sanction of the National Adjustment Budget, the favorable vote of the IMF board to extend the original agreement and a certain "pax" exchange, could not recompose the private offer of foreign currency. Evaluating the behavior of international reserves, it is noted that Sandleris arrived at the agency with a stock of US $ 49,568 million and up to November 16 was $ 52,198 million. The increase was $ 2,630 million. But if the IMF's second disbursement of $ 5,631 million is denied, the loss of reserves in 38 business days was $ 3,001 million. The drain of capital continues.

X-ray the behavior of international reserves, we will see what happens with the weights, situation described in the following table:

Analyzing the policy implemented by the new BCRA authorities, coinciding with the the double plane of zero, the monetary base fell -6.7% while loans to the private sector fell -2.2%. Restrictive monetary and credit policy that deepens the ongoing recession.

In exchange, the Liquidity Charts (LELIQ) that replaced the LEBAC increased by 110.9%, issuing a whopping $ 355,460 million in just a month and a half at rates that started at around 73% and the last cuts are 10 points below that limit. This change in the assets of private sector credit banks due to very high rates of liquidity is financed by a growth of fixed-term deposits in the financial system of R $ 190,758 million, 24.7% in some months and medium.

The growth of the broader monetary aggregate (M3) is then explained by 5%, despite the restriction of monetary policy. All weights are placed in banks with letters and certificates of deposits.

Sandleris hires the monetary base and private credit, but at the same time Expands exponentially speculative financial instruments, concentrating the effects of this policy within the banking system. It does not "release" market weights to pressure international reserves, but "puts" card banks at high rates that fund them. forces the capture of deposits at high rates. Documents are filled in financial institutions that are funded by deposits whose owners look at the time of each monthly renewal when the dollar is quoted and what the interest rate offered is.

There are no longer "monthly supercharges" with LEBAC maturities that put the market in suspense, but there is an overlap in the interest rate / devaluation rate, where if the first the seat race can be very complicated.

The Central Bank disarmed the "LEBAC pump", but re-armed the "LELIQ pump". The difference is that the latter is all within the banks.

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