The one who bet on the dollar this year, despite the currency run in July, seems to have done so it has lost the race against the rest of the prices in the economy. Although Council advisers recalibrate their 2022 inflation projections after surprise November data, they all agree that inflation will be close to 100% this year and all market prices have risen below that figure.
In that universe, the blue dollar was what he had a more modest leap since the beginning of the year. Free trading closed this Monday with a $4 jump to $325 and ended the first Monday of 2022 at $206. That $119 difference implies a 57% jump, even behind the hike the Central Bank has validated for official exchange in this period.
The wholesale dollar rack up a 69% boost so far this year. Although the government has applied all the strategies at its disposal to avoid a moderate jump in this price, in the last two months it had accelerated its daily pace of devaluation to prevent the peso from appreciating further.
Financial dollars move almost in the same line. which, despite the leap they made in the middle of the year in the midst of the peso debt crisis that ended with the sudden departure of Martín Guzmán from the Ministry of Economy, since August they calmed down again. And while most economists agree that cash with liquidation, the way companies use to become dollarized, still has a strong upward trend, it looks like they’ll end the year without any problems.
The blue dollar lag seems to be the most notorious. After the historic peak of $350 reached on July 22, Batakis was in full swing at the Economy Ministry, the price of street tickets dropped to a low of $282 on the day Sergio Massa was appointed as his replacement. Then the price stabilized and it has remained above $300 since mid-November.
Several measures taken by the government have contributed to this calm in the parallel market. On the one hand, the creation of the Qatari dollar, announced at the end of October and entered into full force at the end of last month. With a tax burden of 100% off the official dollar price for those who spend more than $300 USD on dollarized consumption, the new tourism exchange rate has prompted Argentines to turn to exchanging tickets before paying with cards.
Also, when the steady decline in reserves began to worry the market in mid-November, the economic team decided to reissue the “soybean dollar”, which allowed the Central Bank to abandon its short position this month and gave the market more air you change.
Economist Andrés Reschini explained: “From July and August onwards we have seen a significant increase in rates, monetary policy started in July at 66.5% TEA (annual effective rate) and is now at 107.3%. Those paid by the Treasury are even higher, reaching 117.4% in the last auction”.
“The policy aims to ensure that there are no pesos on the street putting pressure on the exchange, even if this has consequences for the business. In any case, the stock of pesos measured as an interest-bearing liability, plus the monetary base continues to grow and accelerate its pace and the question is how long it can go on,” Reschini said.
Precisely, the question to the Municipality is whether this “exchange summer” It could extend beyond the end of the year. PPI analysts pointed out: “In this context of strong issuance of pesos, the CCL (dollar counted with liquidation) continues without showing any reaction. Over the past thirty days it has only risen by $7 or 2.2%, which implies a more than marginal increase.”
At the same time, they argued that if the price of the financial price is adjusted by the monetary aggregates, the price of cash with settlement it should be around $390 and that the current price of $332 is just 14% higher than the minimum value recorded during the management of Alberto Fernández, in December 2019.
Source: Clarin
