It’s what they have “anti-curler” regulations: sometimes, for suppressing an arbitrage business a financial gap is generated which makes the search for profit even more appetizing for opportunity seekers. And market analysts observed how the difference between the “cash with liquid” and the MEP dollar exceeded the 4% level after the last measure of the Central Bank.
That gap – called “exchange” in the jargon of the financial market – is the highest recorded for a year, when the restrictions were lifted for individual savers. In recent weeks this gap was around 3%, with a slight upward trend.
And the escape occurred after the BCRA published its latest measures, which make exchange operations more difficult.by stretching the span of the “cross constraint”. That is, those who sold dollars in the CCL market must wait 30 days to carry out operations again with securities that can be settled in foreign currency.
The measure aims to stop a growing “roll” carried out by investors, both individuals and the financial management of companies.
The scheme consists of buying dollars in the local market, at the official exchange rate and transfer them to foreign accounts. Then the same currencies are re-entered, but in the “liqui cash” market, which allows the difference to be captured. Speaking in silver, about $67 for every dollar sold.
The BCRA, at the same time made part of the stocks more flexible -for example, it eliminates the obligation that exports made by individuals must be converted into pesos-, toughened the practice of this “roller”, considering that it distorts the market.
According to the Outlier consultingthe main reason for the Central Bank to stop this arbitration is to avoid an obstacle in the new policy of massive purchase of reserves: “In the transfer abroad, the currencies left the orbit of the BCRA and then did not return, because they were operated against foreign currency exchange (if MEP is exchanged by cable, the dollars do not enter again, since they are compensated between entry and exit). Without exchange arbitrage flow, that effect would be cut off.”
However, The measure has sparked criticism among experts, who believe that the obvious result will be a lower supply of dollars in the CCL market and, therefore, an increase in its price. This, in turn, will widen the distance with the MEP – also called the “Stock Market dollar”, which will accentuate the perception of “country risk” and will provide incentives for the use of new “curlers.”
Dollar: a curler with history
He CCL and the MEP are two similar exchange ratesin the sense that both reflect the cost of the dollar when purchasing capital market securities in pesos and reselling them in foreign currency. But they have a fundamental difference: while the MEP implies that the dollars are collected and kept in the country, the “contado con liqui” is kept in a bank account abroad. In other words, when a higher exchange rate is paid in cash with liqui, what the investor is recognizing is a premium in exchange for the peace of mind of having the currencies outside the borders.
Consequently, what has been seen historically is that this “gap” between the two exchange rates tends to widen at times when investors perceive greater political risk – including the possibility of a default or re-profiling of the sovereign debt.
As a historical precedent, this difference had had a sudden rise in 2019, after the defeat of Mauricio Macri in the STEP. At that time, fearing that they would not be able to meet maturities, investors adopted defensive strategies, getting rid of sovereign debt securities in pesos and positioning themselves in dollars abroad. Thus, the gap between the MEP and cash with liquid reached a record of 13% and was around 10% for several months.
Then, during the Peronist government, there was a time when the gap jumped to 5%, around October 2022, due to the nervousness of the market, which saw difficulties in Sergio Massa to face the debt. Then, already in the middle of the electoral campaign, there was a new jump from the CCL, which analysts attributed to typical defensive moves to hedge against political risk.
This gap was also altered by increasing regulation, that repressed the MEP quote. Thus, during a few days in July 2023, the difference between the CCL and the MEP reached a shocking 11%, which gave rise to the most experienced in the market to specify a “roller” that left an instant profit of $56.26 for every dollar -when the MEP cost $495-.
Once the Milei management began, in mid-2024, there was a strange effect, in which the “exchange” was reversed. That is, it was done The MEP dollar is more expensive than the “liqui cash”. Analysts attributed it to an exceptional effect, like money laundering implemented by Toto Caputo and the massive purchase of the MEP dollar by small companies that did not carry out international operations.
An investor scare effect?
A speculation that is running around these hours is that what motivated the BCRA to segment the markets is the will to stimulate cheap financing with the MEP dollar, either for the corporate segment or for the Treasury itself. “This was happening with the exchange at 3%, so it is to be expected that, with a higher spread, what we were already seeing will be exacerbated (YPF at 4 years at 5.5% or Pampa at 3 years at the same rate, for example),” argues Outlier.
Criticism is also circulating in the sense that, with the new restriction, the BCRA seeks limit the menu of options for high dollarized liquidity that exists in the market today, and that can be attracted by Argentine sovereign debt bonds such as Bonares and Globales, as well as US treasuries. But there are analysts who warn of a possible boomerang effect, in which those dollars, instead of being channeled into local placements, end up permanently going to more profitable and secure environments.
Why does the possibility of a widening gap between the CCL and the MEP raise concern? To begin with, because this situation entails an unspoken message to investorsin the sense that it increases the risk of having dollars within the country. In fact, this restriction ended up overshadowing the signal that they wanted to send to the market, which was a gradual lifting of the remaining exchange rate.
There are analysts who argue that investing local market liquidity is discouraged, given that there is a difference in favor of securities that can be settled abroad.
For now, the high parity of Bopreal 26 drew attention, at levels of 115% and expiring at the end of May. “It is inferred that there is pressure from companies to dollarize outside the stocks”observe a report from the Clave Bursátil consultancy.
Among the most critical, there is the risk that a greater “swap” will have the effect of making the Treasury’s return to international credit more difficult and distant. Even though Toto Caputo has declared his intention to stay away from wall street In order not to validate high rates, the truth is that economists are skeptical about their ability to cope with the demanding debt maturity schedule. Especially next year, when US$34.4 billion must be settled between the Treasury obligations and those of the BCRA.
