The Current Rate of Intervention Is Unsustainable

The BCRA sold more than 800 million dollars since the FX market changed from positive to negative on August 26. There are several factors behind that. There were companies that canceled debts in dollars, banks that had reduced their foreign currency position a few months ago and now recovered it, purchases at the beginning of the month from retailers and a decrease in the liquidation of exports, something totally logical considering two factors: the seasonality of the harvest imply less dollars available in the second semester and the devaluation expectations suggest that it is convenient to wait. Between August 3 and September 6, the firms canceled debt in dollars for 291 million. In July that number had been just 36 million. In the case of banks, between January and July it had reduced its holdings of dollars by 574 million.