Soybean Dollar 3: BCRA’s liquidations and purchases have improved, but the plan will close far from its target

With three days left before the end of the third issue of soybean dollars, the settlement rate has improved, as has the level of withholding dollars obtained by the central bank. However, both variants were significantly lower than the first versions. It also fell far short of the official targets.

In terms of foreign exchange income, the program has met at the edge of its maturity of 70% of the original target since April 12 when it was named Exporters Incentives Program III, the agricultural export complex liquidated US$3,542 million, compared to the official target of US$5,000 million. Of this amount, BBK bought about US$885 million, although it was not able to keep it in its reserves.

However, the program’s performance has led analysts, until a few days ago, to expect a lower end result. But sales have improved in recent rounds, which also allowed the central bank to go from owning only 13% of what was liquidated to 25%. Although this percentage was also not enough to prevent a decrease in reserves. In total value, reserves broke a new high on Wednesday, dropping below US$33 billion.

Good farm dollar settlement before local holidays on Thursday and Friday and US holiday on Monday. Dollar sales in the “normal” window were among the highest since the launch of PIE III. Financial advisory firm Aurum said BCRA holds 24% of what is settled, significantly less than Soybeans 1 and 2.

Also from Ecolatina, they highlighted the improvement in closing the short week, clearing $493m, with a marked recovery on the last day before the holiday, bringing FX inflows to $333m. Thus, the advisor explained, “The average daily settlement has been above $160 million in the past three rounds. Until last Friday, the average daily settlement for May was $102 million.”

Thus, over the entire implementation period of the program, the average settlement is 118 million USD, which is barely 30% of the average of the first issue, with 403 million USD per day, also less than the second issue. 137 million dollars a day. To make matters worse, another significant difference is that the previous issues were implemented to stimulate the liquidation of remaining stocks, after a record influx of foreign exchange during the period of heavy harvest. Now, on the other hand, the plan is being implemented at the time of the largest monsoon season for the sale of grain, which was wiped out by drought, and with it the BCRA reserves.

“BCRA’s meager uptake of software-settled foreign currency stands out: it held only 24%, while in the previous two issues it bought close to 65%,” added Ecolatina. Strictly speaking, of the more than $8,000 million entered in September last year, when the mechanism first appeared, the central managed to get 75%, i.e. retain about $5,800 while accumulating in December last year. 2,300 million of the $3,100 million entered the field.

The dynamics are now more urgent, and although the economic team still maintains its forecast of a strong inflow of foreign currency in the last three days of the programme, the truth is that the end result, according to Ecolatina, has been “weak”. The advisor attributed this to a combination of factors “logistics, strikes at ports, delays in harvesting and sowing, and incentives: political rumors, an increase in the exchange rate gap, low world prices for soybeans and expectations of currency devaluation.” .

Read on: