MercoPress. South Atlantic News Agency

Argentine minister 'satisfied' with the market response on first day without the dollar clamp

”We are satisfied with the result as there were almost no sales in the retail market” and the Central Bank did not sell dollars either, underlined Prat-Gay.

Argentina's Finance Minister Alfonso Prat Gay said on Thursday that the first day in the market without the dollar restrictions imposed by the previous administration, had been positive and as they had planned or expected. Compared to the previous multi-tier system, the dollar appreciated in the range of 25% against the Peso in the unified market.

 “We are satisfied with the result as there were almost no sales in the retail market” and the Central Bank did not sell dollars either, underlined Prat-Gay.

The only “active” marketplace was the wholesale segment with few buyers where the dollar price stood at 13.40 pesos while in the retail segment “there were almost no transactions.”

“There were more sellers than buyers” the day after the government lifted the currency controls, Prat Gay told reporters specifying agro exporting firms “didn’t sell what they had planned.”

In effect agro exports firms have promised daily sales of up to 400 million dollars, but on Thursday, ”they only operated in the range of 45 million“

Anyhow, ”how long has it been since the Central bank did not lose reserves?, asked Prat Gay to financial reporters. He added that the absence of buyers can be attributed to the fact that many companies are over-bought.

Besides ”today was not a normal day because the futures market did not operate and banks were processing all the new rules (referred to the end of the dollar clamp and other restrictions). But our assessment of the day is that buyers were absent, not the people willing to sell dollars“.

When the minister was asked if 13.50 Pesos could be taken as a reference price for the US dollar, Prat Gay said ”we are going to feel comfortable when we have brought inflation down, which is our main objective, and then the exchange rate will fluctuate at the level it finds an equilibrium, and we will have to get used to that“.

Prat-Gay also revealed that the fiscal deficit is in the range of 7% of GDP, but ”we need to make an inventory before we advance. Once this is clear and so is the objective inflation, we will discuss it at an social-economic roundtable”.