There are two operational shifts left in January, but the first month of 2023 can already be considered the month in which the dollar consolidated the climb. The blue dollar closed this Friday at $386 and struck a jump of almost 12% in the month. The financial dollars, which should have calmed down due to the “buyback” operation.They’re up nearly 8%. The currency gap It’s already around 100%.
AndThese financial exchange rates and the gap that results from the difference with the wholesale dollar are slightly worse than the day of the buyback announcementaccidentally entered the field of suspicion for possible use of privileged information.
But beyond that detail, the dollar escalation has translated into more work for the Central Bank money table, which In the week now ending alone, it had to sell 211 million dollars. Of course, there is no direct correlation between the blue dollar and the sale of dollars, because logically Central Bank currencies go to importers who manage to overcome the real hurdle that has become buying dollars at the official price.
Now him The January balance of reserves is negative. After the strong purchases of the first part of January, Centrale has become a net seller. The balance of the month is that between purchases and sales it was 76 million dollars lower at the end of December.
The leap in dollars anticipates, perhaps, what we can already see: the impact of the drought could take away no less than 10,000 million dollars that was last year and this.
The Economy Minister, Sergio Massa, has managed to build up the buffer of reserves with dollars Soy 1 (at $200) and Soy 2 ($230) and it is assumed that there will be more exchange rates focused on the agricultural sector.
Massa knows that the change gap play against himbecause the greater the gap, the greater the hesitation of exporters to liquidate their currencies.
But dollars aren’t just a cause for concern in terms of net reserves. The analysts’ impression is this company prices incorporate an increasingly important part of the dollar price counted with the liquidation, with which the increase of this, and its separation from the official rate, also has an inflationary effect.
It happens that the obstacles to access to official exchange have led many companies to forget the 180-day wait established by the BCRA to sell foreign currency, and many importers go directly to the financial market to buy their dollars. They do not care that by operating in the CCL they are excluded from the single free exchange market (MULC) where in theory one could buy dollars on the official market.
So if there are more and more companies buying dollars in the CCL, it stands to reason that there are more and more prices that they consider the dollar at $370 instead of the dollar at $185.
The latter explains why the announced bond buyback was a move aimed more at curbing the increase in liquidity with the liquidation than at improving the credit profile (country risk) of the state and companies.
But from what we have seen so far, the market does not believe that the operation will have great effects: neither in lowering country risk nor in halting the rise of financial dollars.
All of this has added pressure to the government’s pegging scheme. The government entered into a comprehensive set of price agreements in November and began promoting parity at 60% per annum at the end of the year. But the alt-dollar escalation above inflation eliminates the possibility of hitting a 4% CPI in April.
The problem is also that the dollar rises when, for seasonal reasons, the demand for money decreases. That is, people do not want to have burdens in their possession and are in a hurry to get rid of them. In December this translated into a little more consumption for holidays and parties. Now those pesos are returning to the system and perhaps the interest rates offered by banks for placements in pesos lose appeal when the saver who he was “distracted” on a fixed-term basis at 6% month has seen that the parallel dollar is already rising to double.
One analyst put the above dilemma in financial terms: “If, for example, the CCL closed the month with a +10% increase, it would give an effective annual rate of 214% (or 290% if the increase for the month was 12%). It would beat any peso rate. It is why when the exchange rate starts to rise the carry trade expires.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.