The Central Bank managed this Thursday to reverse the selling trend on the foreign exchange market and concluded with purchases for 4 million dollars. In addition to managing the trickle of reserves, the body tries calibrate the daily rate of devaluation to prevent the exchange rate from being “behind” the rise in prices.
For me yes. asks the body presided over by Miguel Pesce calibrate the interest rate for deposits in pesos, the increase in the dollar with the increase in prices. But, in February, the Central Bank “let the price of the US currency go up a bit behind from the rest of the economy prices, which according to most city advisors have risen by about a 6% monthly. Specifically, the Central authorized in the 28 days of last month an increase of 5.4%, therefore, it would have lagged inflation for the month.
Analysts believe that in the face of inflation that seems “indomitable”, the margin of the Central is increasingly limited. Martín Vauthier, from the consulting firm anker, He hopes that in the coming months the institution will choose the official dollar”like half an anchor“If the priority of the Ministry of Economy and the Central Bank is to lower inflation today there is no short-term program that allows the economy to grow, inflation to fall and reserves to build up”.
“In these restrictions, the Central applies all the tools at its disposal: on the one hand, a positive real rate, on the other, selling dollars for pesos in the bond market to keep the exchange rate gap anesthetized and, third, to use the official exchange rate as a “semi-anchor,” Vauthier said. “We believe the plant will maintain a rate that beats inflation and inflation beats the official dollar.”
While official interventions have helped to narrow the exchange rate gap below 90% against cash with liquidity and MEP (see infographic)the risk of “devaluing” the official dollar is that demand from importers remains high and the Central is unable to obtain the reserves it needs.
A report of LCG Consultant He noted that the only way to deal with this problem is for the postoffice to run it “tighter control of importsbut this option has a certain upfront cost to your activity level.
For the economist Juan Pablo Albornoz, from Inveq, The dollar is far from behind in this scenario: “Although the official ended February with an end-to-end change (2/28 vs. 1/31) of 5.5%, the depreciation rate analyzed in this way can be somewhat misleading,” he said and recalled: “In January and February the creep pace was 5.5% end-to-end each, but February had four wheels less.
In this sense, Albornoz explained: “I prefer to see the average weekly change of the bottom five reels in annualized terms. It allows us to see what would happen if the BCRA kept the same weekly depreciation rate as the last 5 days for a year. Analyzed in this way, the official ended February running at an annual effective rate of almost 100%, in line with past inflation (close to 100%) and REM inflation expectations.
His colleague, Sebastián Menescaldi, of Echo Go, said: “Seeing how inflation hit us in February, 6.4%, the exchange rate lagged behind. But if inflation picks up again in March, it is very likely that the central bank will be forced to accelerate the crawl rate so as not to leave the dollar far behind”.
The fragility of the current situation requires Central to struggle to balance these variables: “Now there is not much room to trample the dollar much. With low reserves and bad expectations due to the drought, the dollar will lag behind to inflation, but reserves will follow.”
Source: Clarin
