The economy minister announced that, after allowing for a 4% increase, there will be a list of 1,500 products that will freeze their prices for 120 days.
So Sergio Massa bet to go down to about 4% per month an inflation that rotates between 6% and 7% and this year aims at 100.
The idea of Economy is that of the prices of basic necessities I’m ahead as a result of For weeks there has been talk of a possible freeze and that companies will agree to participate by betting on obtaining one of the most valuable prizes offered by official policy.
In this exchange, the companies will leave those prices unchanged in exchange for compliance by the government sell you dollars at $160 to pay for imports.
The premium is interesting when you take into account that there are companies that already factor a dollar of $400 into their costs before the government-mandated changeover tap shuts down.
The calculation corresponds to the lag that mirrored the dollar against inflation: $350 dollars last Julyadjusted for inflation it would be at $435 while liquidity with liquidation is approximately $308.
Obtaining dollars at the official price is very difficult and Massa is well aware that he had to resort to the devaluation of soybeans with the dollar to get exporters to pay off in advance about 8 billion dollars.
It was September, but in October and November the central bank sold dollars (already $1.2 billion) to supply the market.
The minister said he will reach the target by the end of the year agreed with the IMF which is an increase in reserves of US$ 6,000 million, all indicating that calculating the turnover of the Fund itself. Analysts believe Massa will have to do it pull another soy dollar out of the galley if you intend to maintain exchange rate peace of mind well into the summer.
The anchor to the expectations that the minister seeks by freezing 1,500 prices collides with the rate of increase of the wholesale dollar which in the last month has increased by 6.7%.
While on the dollar side the situation appears a little more stabilized, all eyes are now on the weights.
The government’s debt swap to moderate November and December Treasury bond maturities ($1.7 trillion) had a membership of only 61% and mostly from the public sector.
The financial “wall” of the elections of 2023 has been gaining strength since the last few weeks: the Government does not sell bonds maturing in 2024 and it’s not because it offers low performance.
The dual bond comes to offer an absolutely extraordinary annuity with a 12% mark-up. so that an investor can get what inflation gives plus 12% and even so the Treasury receives no funds.
It is clear that investors (investment funds, banks, insurance companies, etc.) they are cautious that the Treasury will pay that interest rateI bet there will be one reprogram next year’s strong peso maturities (equivalent to approximately USD 18,000 million) and navigate uncertainty about who will win next year’s elections and what policy will be adopted to deal with the debt, both in dollars and in pesos.
But meanwhile, the Treasury will have to finance the deficit and the chosen path is again, albeit with an important variation, the issue of weights by the Central Bank.
The Government has promised the IMF not to issue short bonds to cover the fiscal deficit, but in recent weeks the Central has intensified the purchase of securities on the market to provide liquidity to the Treasury.
The BCRA is also acting bond buyer of last resort in a market that agrees to finance the Treasury only until the primaries of 2023. A new financial phase with political roots that will deepen from now on.
This source of emission comes into play as part of the $550,000 million that the cash bills that the Central Bank places in banks accrue monthly interest to meet fixed-term deposits. The carousel of pesos enters into force in the context of 100% annual inflation.
Source: Clarin
