Until now, that possibility was not available unless the US dollar had ever broken through the exchange rate band defined in the agreement with the International Monetary Fund (IMF).According to the BCRA, the demand for pesos had been withdrawn due to a trend towards dollarization.The decision on reserves also seeks to bring calm to the markets.In it, the monetary authority details that after the mid-term elections, an opportunity opens for the recovery of money demand, which would be compatible with the injection of pesos through a dollar purchase.Not only that, but that demand was also caused by the government's monetary policy and the sharp rise in interest rates.Werning indicates, in his presentation, that the main sources for injecting pesos into the economy “are not available”: the fiscal deficit and the de-leveraging of debt.He mentions that the remonetization would come from the purchase of foreign currency from the “external money” generated by the surplus.“By setting the pace of reserve purchases to finance a projected increase in the amount of pesos demanded, monetary policy can help boost external liquidity, which, by stabilizing exchange rate expectations, indirectly helps preserve internal stability,” explains the Central Bank's document.The Central Bank of the Argentine Republic (BCRA) expects that in the coming months it will buy and accumulate reserves that will serve to remonetize the economy, which is a message to the markets.The BCRA's plan is only known today, after the entity published a presentation that its vice president, Vladimir Werning, made to investors weeks ago.For now, this version is only available in English.
