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Itaú Highlight Liquid Dollar Balances Fell Again By The End Of January

CHILE
  • Potentially contributing to the Peso’s renewed weakness, Itaú have pointed out that low dollar balances explain smaller-than-expected dollar sales by Hacienda during February, which totalled just $300 million. They believe dollar sales during March are likely to be below the USD1.5 billion remaining to complete the quarterly USD3 billion guidance.
  • Itaú said that according to the Budget Office’s Monthly Asset Report, liquid dollar balances held at the Treasury fell to USD470.25 million by the end of January, down from USD525.88 million by the end of December 2023, and significantly below the USD3.3 billion of January 2023.
  • The low liquid dollar balance by the end of January suggests likely reflects the combination of lower-than-expected inflows and higher outflows.
  • Regarding the former, dollar inflows reached at least USD2.5 billion, sourced from a dollar-denominated bond issuance for USD1.7 billion, and a USD800 million withdrawal from the Stabilization Fund, while dollar-denominated mining-related revenue likely surprised to downside. On outflows, dollar sales reached USD1.2 billion during January, which suggests external debt service and capital injections may explain the difference.
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