The two versions of the soybean dollar (from 140 to 200 dollars and from 167 to 230 dollars) have created in the government the feeling of having crossed the exchange rate bridge which implies passing the end of the year and aspiring to have a calm exchange until March-April when soybean export dollars would start arriving.
The soy dollar it complied with a rule of the Argentine economy: faced with a situation of exchange lag and inventories, the devaluation makes the dollars of agricultural exports appear.
For the government, the feeling of currency relief has increased considering that the mid-year crisis has been overcome which, with the resignation of Martín Guzmán, had brought the country to the brink of a hyperinflationary precipice.
The fear of continuing to fall aligned the decisions and the vice president Cristina Kirchner a phase of acceptance of a set of decisions that until then had been resisted and criticized began.
Sergio Massa he took office as economy minister, reaffirmed the fiscal adjustment and IMF deal, and became the official able to get the dollars needed to ward off the combined ghost of devaluation and hyper.
At the gates of 2023, one of the obvious doubts is how much the election campaign in government economic decisions bearing in mind that there are two important issues whose resolution does not depend on politics.
One of these, and it is very profound, is whether Minister Massa will be able to achieve the objective Dollars necessary to avoid a sharp devaluation (the real exchange rate is estimated to be 25% behind) to get to the year-end elections.
But the drought affecting much of Argentina could significantly reduce dollar revenues. in front of it the government sings retruc and aims to achieve significant foreign exchange savings in 2023 thanks to lower energy imports. The clearing of the foreign exchange balance in the middle of next year remains to be seen
The other issue, of a clear economic nature, is the concentration of debt maturities in pesos in the first part of next year and also taking into account that the market is resisting lend to the Treasury for periods beyond 2023.
In the first auctions for funds this year, the Treasury obtained a loan with an average duration of 607 days. In July, in the midst of the exchange crisis with the blue dollar at 338 dollars (Thursday it closed at 330 dollars), the government was able to obtain pesos but for a period of 175 days.
end of November the average duration of the funds obtained was 141 days and with the particularity of being placed in dual bonds which offer the highest income between inflation (cer bond) and devaluation (linked dollar)
In recent days, and based on Sergio Massa’s bet that the inflation rate will rise for April “will start with 3” Market participants have started to “run” from index-linked bonds to fixed-rate bonds, risking that the minister will base his summer anti-inflation tactic on a high interest rate.
Market participants (including entrepreneurs) believe that Massa will strengthen its “give and take” policy (essentially slowing price increases in exchange for a promise to authorize a $174 wholesale dollar to pay for imports) with the scheme of price increases of 4% per month compared to a peso rate of 6.3%.
The financial strategy of the “rate kills price increases” comes after one of the summaries of the economist Roberto Frenkel, an expert in stabilization plans, was realized: to lower inflation, one must first generate inflation. And Argentina created it.
The year began with an inflationary regime of 3/4% monthly and the mid-year crisis brought it to 6/7%. Now Massa aspires to return to the starting point, even if the annual vote of 92.4% makes it clear that the road that remains to be traveled is very long.
hand in hand Lionel Messi the football team has given enormous joy to all Argentines but in 2023 two key economic data such as the dollar and the peso will play another championship.
Source: Clarin
