CNV removes loophole with new restrictions for MEP, CCL rates
Government tightens ‘cepo’; Officials want to remove loopholes enabling purchasing of cheap dollars on the stock market in order to resell them at a higher price at Central Bank’s expense.
Argentina’s government on Wednesday tightened the socalled ‘cepo,’ removing a financial loophole used by traders to make easy money by exploiting the country’s complex web of currency controls.
In a statement issued Tuesday, the National Securities Commission (Comisión Nacional de Valores, CNV) announced Resolution RG 962
In a new measure designed to cut off the shortterm profiteering known locally as “rulos financieros,” the government has ruled that those buying dollars at the MEP (medio electrónico de pagos) rate and selling them for the bond-based CCL (contado con liquidación) rate will have to wait at least 15 days before completing the transaction.
As from last Wednesday no client acquiring MEP or cable dollars will be able to use them for the 15 following days.
This implies that any purchaser of MEP or cable dollars using AL30 and GD30 bonds will not be able to buy or sell greenbacks for the next 15 days via any asset which is not an AL30 or GD30 bond.
Government officials describe the measure as a move to halt the speculative strategy of buying dollars cheap at the Bolsa rate and then reselling them dear at the cost of Central Bank reserves.
The parking rule applies to those who buy dollars through the stock exchange, generating dollars via the ‘MEP’ or ‘CCL’ rates.
Argentina’s government has strict currency controls in place and utilises a huge range of exchange rates to manage access to foreign exchange.
The move came as Argentina’s Central Bank reserves dropped to worrying levels. Gross reserves fell to US$32.9 billion on Tuesday, the monetary authority said in a statement, underlining the impact of one of the worst droughts on record.
With exports plummeting and heavy debt maturities scheduled for June and July, fears are growing about Argentina’s ability to meet payments.