The Central Bank tries to support the idea of a slowdown in inflation and drastically lowered his daily rate of devaluation. In fact, if you take a photo of the last five days as a sample, the organism brought peg crawling to 5% per monthwhich can give the model of the number that the government expects to be released by INDEC this Thursday.
The Central decided for months manage currency arrears and keep the dollar from outpacing the rest of the prices in the economy. The strategy can serve as “still” in a pre-election scenario, but it entails costs, especially for the business. An exchange rate of $180 to the dollar discourages export incentives and induces various sectors to request “tailor-made quotes”in order to carry out their liquidations.
After the November inflation data, the BCRA “moved” with its depreciation rate. analysts of Coen noted: “The monthly depreciation rate has decreased slightly, from 5% in the last 30 days to a monthly equivalent of 4.8% in the last week”.
Santiago Manoukian, of ecolatinHe explained: “2022 marked the second consecutive year of currency appreciation, close to 10% Compared to the end of 2021, when the exchange rate appreciated by almost 20% when used as a price anchor in the context of the mid-term elections. Last year this trend continued and we arrived in December with the exchange rate appreciating 25% more than seen in 2019.”
For the economist, The government will maintain this strategy in 2023. “Although he is carrying on a fiscal and monetary adjustment, the third part of that regime, which would be an exchange rate adjustment, will not. The lag caused by the multilateral real exchange rate will continue to threaten the reserve accumulation process and the external competitiveness that the country needs.”
However, Manoukian doesn’t believe the government will allow the peso to appreciate much more. “Throughout 2022, global inflation and the dollar’s weakening internationally helped keep the peso from appreciating significantly. Managing the daily rate of devaluation so that it follows inflation also serves this purpose. We don’t expect the government to try to retrace the delay, but to manage it.”
One of the problems with this strategy is usually the currency gap. However, while the dollar slows its upward pace, the parallel dollar, especially the financial one, remains without putting pressure on the “ceiling” of the gap.
“This could be due to two factors: public sector sales pressure on instruments such as the GD30 and the activity of more foreign tourists. We can already see the compression of the MEP’s gap with the official one, by finding himself 80%. The CCL, for its part, is inside 87%values not seen since the beginning of June,” said Cohen.
Even if the gap seems more “controlled,” without an exchange rate adjustment, it can be “wake up” at any moment, which would make exporters less attractive to liquidate their dollars and further complicate the accumulation of central bank reserves, in months already compromised by seasonality and the impact of drought on the harvest.
A recent report from the consulting firm Quantum He pointed out that, all exporting sectors’ exchange rate differentials are averaged, including the soybean dollar and tourism special prices, both for goods and services, the official dollar is closer to $200. In other words, the government, trying by all means to avoid a formal jump in the dollar, is forced to “give a premium” to maintain the level of foreign exchange earnings.
Source: Clarin
