Exporters rushed to liquidate their currencies because of fear of a rise in withholdings and the exchange rate collapsed

“The government is playing with fire,” said one operator as he watched the dollar fall in all its versions on screens. “Exporters are liquidating everything they can before they impose more withholdings on them,” he added.

The market seemed to be right because the Central Bank bought $91 million in the wholesale market, which did not allow it to increase reserves - which dropped USD 41 million to USD 37,222 million - because there were payments to foreign agencies.

What seems inevitable, after today's February inflation rate is known, which may be up to just over 4%, is the rate hike that will push against any attempt to raise the dollar. And, in case reinforcements are lacking, there are the tax maturities that force the hard currency to be rid of to face them.

That is why yesterday the market experienced something unusual. Financial dollars were cheaper than the solidarity dollar. The MEP dollar, which closed at $185.60 (-$1.81) and the cash with liquidation that ended the round at $188.58 (-$1.62), were below the solidarity dollar that traded at $189.17. The dollar card ceased to be business for travelers and now it is convenient for them to pay in dollar bills abroad, because the difference with the “blue” that yesterday was paid for $195 and sold it for $200 (-$2) is not even business.

Those who traveled and must pay for the card, must sell more dollars than they spent to cover the summary that is valued in pesos and with the stamp tax surcharge of 1.2% in CABA.

The collapse of yesterday's dollar has only one explanation: the hasty liquidation of exporters, a move that can be reversed in the coming days if the government insists on raising the withholdings of soybean flour and oil. Argentina is an importer of soy, because domestic production is not enough to supply foreign markets with industrialized oilseed derivatives.

Meanwhile, debt bonds accompanied those of emerging countries, where the MEA, the indicator or ETF that summarizes them, lost 2.4%. Local bonds lost up to 0.90% and country risk rose 13 units (+0.6%) to 1,807 basis points.

The Stock Exchange also paid the cost of the collapse of world markets and internal conflict over withholdings. The S&P Merval, the leading index, lost 4.54%. The turnover of $1,324 million gave it consistency to the downside because there was a high profit taking in the face of the unforeseen change of the government's rules of the game that included a surprising increase in fuels. The most pronounced declines were those of Cresud (-9.03%), the company most affected by the ban on the export of soybean flour and oils; Pampa Energía (-7.42%), driven by the sharp drop in oil in the world, and Transportadora Gas del Sur (-7.04%).

ADRs - certificates of holding shares listed on the New York Stock Exchanges - also had a hard time in particular Transportadora Gas del Sur (-6.90%), Cresud (-6.39%) and Pampa Energía (-5.30%).

The market awaits key developments this week: on Wednesday interest rates will rise in the United States and the Ministry of Finance will tender different bonds to cover the maturity of the letter that indexes with CER (TX22) that it tried to exchange last week with relative success because it only managed to change a little more than half and most went to public bodies. Now, it seeks to place new bonds to cover the remaining $248 billion that expires on Friday. The exchange failed because the CER bonds offered were very long-term. Seventy percent of these titles became the responsibility of the next government since they expired between 2024 and 2028.

The other novelty that the market awaits is what will happen to withholding and raising local interest rates. The dollar is held by pins on one of the lowest floors.

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