The dollar closed yesterday at 38.63 pesos, down 12 cents. The wholesale exchange rate was 37.58 pesos, down 13 cents. The currency returned very close to the floor of the exchange band, which ended yesterday with 37.55 pesos. This week, the Central Bank intervened in three of the five working days to place the dollar in the non-intervention zone.
Since October, there has been a trend of both nominal and real appreciation of the exchange rate. In the monetary authority, they do not show concern about the phenomenon because it allows them to moderate inflationary pressures. The agency maintains interest rates close to 60% and continues to accumulate monetary liabilities.
The entity in charge of Guido Sandleris yesterday renewed Leliq for 162 billion pesos. It offered an average rate of 57.25%, slightly below the previous day (57.32%). For more than a month and a half the monetary authority has kept it around these levels. Central rate policy causes high costs in corporate and consumer lending lines, which slows activity and limits demand for fixed income sectors.
The daily monetary report said current account advances, one of the most common credit lines for local businesses, were offered yesterday, with average rates of 61.2%. The financial cost mainly complicates small and medium-sized enterprises. The government is examining measures to moderate the cost of checking discounts, a policy reminiscent of Kirchner's interest subsidy, which had been criticized to the point of exhausting employees of the current economic team.
Fixed terms also record high interest rates that, for now, can support the demand for money. The CB specified that the average of fixed-term deposits in banks paid an annualized rate of 43.62%. The banks with these resources take turns buying the Central Bank's Leliq, an instrument that expires in 7 days instead of one month and pays more than 57% of the income. It is a round business for financial institutions.
With regard to reserves, yesterday they were located at 66.255 million dollars, with an increase of 90 million. So far this year the CB has maintained the level of exchange. In the coming months they will start to fall due to debt repayment.