After a year in which the loss of Central Bank reserves has made headlines, the monetary authority is set to begin 2015 with more foreign currency in its coffers than it had at the beginning of 2014.
The Central Bank’s foreign currency reserves have soared almost US$1.5 billion over the last week.
Reserves yesterday increased US$267 million, taking the monetary authority’s international reserves to US$30.707 billion, higher than the US$30.6 billion held on January 2.
The increase in reserves is thanks to telecommunications companies and China.
Telecommunication companies have helped the Central Bank boost up its coffers by bringing in the cash to pay for 3G and 4G spectrum they had won at auction, amounting to almost US$500 million so far.
Meanwhile the third tranche of the currency swap deal with China entered the country last week, boosting reserves by US$1 billion.
Telecom cashed in US$274 million for the purchase of 30 MHz or radio frequencies in which the company plans to provide 4G internet services, and an additional 14 MHz to extend its 3G services.
On Tuesday, Telefónica had brought US$209 million into the country to pay for a similar package of frequencies, following China’s completion of its new billion-dollar loan last Thursday.
The first one to bring in the cash was Claro, a subsidiary of Carlos Slim’s América Móvil, which disbursed US$281 million in the first spectrum payment from a telecom firm.
Despite the large numbers, the incoming dollars from spectrum purchases could have been even larger if the Communications Secretariat had gone through with auctioning a part of the spectrum it had originally offered in its call for tenders.
The fourth company involved in the auction, the national Arlink, owned by the Vila-Manzano group, has not received any of the spectrum it bought and so has not put up any of the cash. This means that from the US$2.2 billion dollars that the Central Bank had expected to get from 4G bids, only US$764 million have entered its coffers. Before any more dollars from spectrum auctions get into the country, more frequencies would need to be released by the department.
On the other hand, future tranches of China’s swap deal should still be expected, as Argentina’s Central Bank is entitled to ask for loans for up to US$11 billion from China in exchange for pesos plus interests rates.
Central Bank Governor Alejandro Vanoli received more good news yesterday when the Senate confirmed his position at the top of the institution, with a final vote of 37 lawmakers in favour and 24 against. His place is now permanent until 2019 after three months in which he was acting president of the institution after Juan Carlos Fábrega’s noisy exit.
Pedro Biscay was also named as a new director at the monetary authority’s board, collecting broader support, with 44 votes in favour.
Pro-government lawmakers and its allies made most of the supporting votes, while opposition came from the Federal Peronism, UNEN and Radical caucuses.
Date: December 18, 2014