BUENOS AIRES, Dec 15 (Reuters) - Argentina’s central bank has clinched deals with its trading exchanges to limit its losses on controversial U.S. dollar futures contracts once it starts devaluing the peso, a senior source at the monetary authority told Reuters on Tuesday.
The new government, which took office last week, has accused the former leadership of the bank of selling the derivatives at below market rates. Prosecutors are investigating those claims.
Under new chief Federico Sturzenegger, the central bank had been considering not even recognizing those contracts. Instead it struck a deal with exchanges to raise the rates in the original contracts, according to the source.
This would limit the monetary authority’s losses and the gains of the private sector, which endorsed the deal.
“The negotiations were hard because everyone defended their own interests,” said the source, who asked not to be named.
Former central bank chief Alejandro Vanoli sold March contracts at 10.65 to 10.80 pesos per U.S. dollar while these were trading around 15 pesos in New York. Vanoli quit last week under pressure from Macri.
On Monday Macri had said he would start this week lifting the restrictions to access to U.S. dollars that were imposed by Fernandez. He has not specified the speed at which he will lift the restrictions, known collectively as the “cepo”.
Freeing up capital controls will likely weaken the peso. Local market sources say they expect the official peso rate would weaken to around 13.5 to 15 to the greenback, versus the current rate of 9.8 per dollar.
Such a significant devaluation move would cost the central bank more than $7 billion in foreign reserves if it were to respect the original dollar futures contracts. Some analysts estimate its net reserves simply would not be enough to cover that cost.
“The new team has closed deals in which everyone had to give a little, but with the knowledge that it’s what’s best for credibility and confidence in this new chapter of the economy,” said the central bank source.
The peso’s black market rate was at about 14.5 to the U.S. dollar on Tuesday. Macri has said repeatedly he wants the black market and the official rates to converge. (Writing by Hugh Bronstein and Sarah Marsh)