At the beginning of 2023, the blue dollar maintains last year’s trend: run after inflation. Between January 2 and March 10, the informal price jumped from $346 to $373, a 7.8% increase, as prices are on track to close out the first quarter with a 20% jump.
Last year, the parallel dollar rose 66.3% year on yearWhile inflation was 94.8%. Thus, those who bought dollars in the parallel market on December 31, 2021 and sold them a year later they lost 15% of their purchasing power.
Financial dollars jumped last week and closed at $380 for MEP e $393 for cash with liquid. Is there room for the blue to stay still?
in dialogue with clarion, María Castiglioni, economist and director of C&T Asesores Económicos, underlined that “having shares in the blue market channels tensions, it is a thermometer. In 2015 we had a similar situationwith exchange restrictions, there was calm in the markets and that was partly because people believed that any of the candidates at the time was better than the one who was governing. This has been reflected in the polls and the optimism has contributed to financial stability”.
Analysts state that the calm of exchange rates reflects the fact that “these are high values in historical terms and reflect a very bad economic situation. The tranquility of the last time is due to the fact that it could have been worse”highlighted Iván Carrino.
Castiglioni explained it in turn the dollar is “stretched because higher interest rates have some impact. This causes some to choose to stay in pesos or with indexed bonds, are some containment factors. But this implies that the government borrows more in another currency and takes on more risk.
Since last September, the Central Bank has raised the fixed-term interest rate tends to be positive in the face of inflation. With ironed blue, small savers turn to pesos in order not to lose against inflation and are suspicious of what happens with blue.
Tomás Álvarez Kuhnle, economist at Analytica, estimates it “the blue value should be 10% higher.. The calm is due to low expectations that a chaotic event of a financial nature will occur. In this sense, barring the result of the elections, it could happen that we see another year of relative stability”.
Dollarize against inflation
“Dollarising in an election year is convenient, because distrust is expected to increase as the election approaches. It is no coincidence that the exchange took place before the elections, because the greater the uncertainty, the less credit available to the government,” said Aldo Abram, economist and director of Libertad y Progreso.
The economist warned that “the price of blue at the end of the year depends on who wins the elections. If the trap is removed quickly, it will fallas happened at the end of 2015”.
But he added that If the next government is slow to put the economy in order, the opposite may happensince “if the president-elect is late in realizing it, the price of blue may continue to rise”.
For his part, Álvarez Kuhnle stressed that “in Argentina People prefer the dollar as a store of value because while it may underperform inflation for a while, it always outperforms it in the long run. So if you have an economic crisis in mind, becoming a dollar can be convenient, but with the risk that this crisis will not come”.
“Today, having stocks and doing everything wrong, the parallel dollar and inflation is skyrocketing in every way. The market expects the new government to leave the stocks at the latest within the first month of its mandate”Carrino pointed out.
How much will the dollar be by the end of the year?
“Put a price on the blue dollar is difficult,” he said Maria Castiglioni. And I add: “When there is distrust, the tendency is for it to increase, especially in a scenario where inflation will continue to be above 100%”.
kuhnle I affirm it there is “a scenario in which the dollar loses against inflation. To the extent that current management focuses on reducing the deficit, spending and the monetary issue, then we find a calm and, therefore, rising dollar less than inflation”.
The Economist carrino estimated that “if current conditions continue a $500 price tag is a possibility”, and remarked that “if the elections are won by those who have reasonable ideas about the economy, and put the public finances in order, reduce emissions and pay off debt commitments, all these measures generate investor confidence and, consequently , the rise of the dollar Obviously, if a coalition less “friendly” to the market wins, then the scenario could be different“, he has declared.
Fernando J. Genazzini
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.