Such is the imbalance of the Argentine economy that, at the gates of the soybean 3 dollar and agriculture 1 with a dollar of 300 dollars which implies a a 42% increase and a 30% devaluation, the question remains whether the measure is sufficient.
On Wednesday, the Minister of Economy, Sergio Massa, launched the new exchange rate scheme that he had anticipated the previous week and which essentially consists of raising the price of the dollar from 211 to 300 dollars for the liquidation of exports for 45 days for soybeans and for five months for regional economies.
According to the estimates of the Equilibra consultant (Diego Bossio / Martín Rapetti), US$7,000 million to be cleared for soybean exports and US$1,900 million for operations of regional economies.
Therefore, for the full year, an inflow of $1,400 million more than forecast is expected and, presumably, with an advance of the liquidations to avoid the liquefaction of the $300 due to inflation.
There are three facts that are now in evidence: 1) the government was up to its neck in water after the Central Bank lost $5.86 million in net reserves so far this year, 2) Central to issue $666.3 billion (equivalent to 0.4% of GDP) to buy the new dollars and 3), and already repeated, both Cristina Kirchner and Sergio Massa do not hesitate, albeit in a subtle way, to apply a devaluation before the precipice which implies the depletion of dollars in the Central Bank.
A $20 billion drought
The hit of the drought and the threat of a drop in exports of 20 billion US dollars compared to the previous year the timing of the exchange rate jump accelerated And the question remains the same: will it be enough for the Government to maintain a certain stability until the end of the year, even if it is foreseeable that it will arrive without liquid reserves in the Central Bank?
One piece of information that works in its favor is that it could save about $4.3 billion on energy importspartly because it anticipated purchases and partly because of lower international prices compared to the previous year.
Another favorable point comes from the side of hospitality tourism, which these days is especially noticeable in the city of Buenos Aires.
In terms of prices, Argentina has become “very cheap” for foreigners visiting the country and bringing dollars, being able to sell them at the MEP of $396 and “very expensive” for Argentines who earn in pesos and face inflation that consolidates above 100% per year.
An imbalance of 4 billion dollars
Even with the sharp increase in hospitality tourism (even the government realized it had to change the law because “airbnb” exacerbates the lack of supply of rental apartments in some areas), the tourism budget would translate into a deficit of 4,000 million dollars, according to Equilibrium.
Both soybean sales, which are expected to accelerate, and in the case of tourism, dollars would enter the first half and one of the keys would be savings to face the second part of the year, always elusive in terms of exchange rates.
In this context, a sensitive point will remain in the authorizations for the payment of imports.
For companies, being able to pay for imports with a dollar of $211 is an advantage; for the government, a loss: selling dollars 30% cheaper than buying the agricultural dollar.
Is the unstable scenario a risk or an opportunity? Soybean exporters now have a window, but so does inflation. The official data for March which will be released on Friday 14th would leave little room for optimism.
The prices without brake
The survey on retail prices conducted by Eco Go (Marina Dal Poggetto) gave a rise of 7.2% in March, what can we expect after the devaluation?
Traditionally, inflation in April is lower than the previous month when, as a result of the return to full work after the summer and the start of school, prices usually spell bad news.
It is evident that Minister Massa has postponed the announcement of the new 300 dollars for soybeans and agriculture to the beginning of April, fearing the impact on the cost of living. Now is your chance to get more dollars, but can you avoid further price jumps?
Source: Clarin
