With the blue dollar above $440 and financial exchange rates which set new nominal records on Friday, the market will resume trading this Monday in the midst of a climate of tension. Over the weekend, the government worked against time to ‘put on cold cloths’ after a week filled with financial rumors and political noise.
Weakness in the soybean dollar, coupled with accelerating inflation and the crisis within the coalition government has had a major impact on “free” prices over the past five rounds. ANDThe government is pressuring grain companies to speed up foreign exchange settlementbut given the high level of uncertainty Exporters say they can’t find soybeans to buy and then liquidate foreign exchange.
A senior industry source said clarion That the market is paralyzed “because of the enormous exchange gap” and it is the producers themselves who, faced with growing distrust, decide not to sell their cereals. “They’ve already entered $1.25 billion of pre-financing. There is no way to continue entering because foreign banks do not lend until there are purchases,” she said.
While settlements from the “soybean dollar” are lower than expected, those from the “agricultural dollar”, i.e. from the export of products other than regional economies, are also lower than expected they have entered limbo. “They are demanding that companies enter at fair prices and so far only 20 of them have enteredindustry sources said.
However, in government they were optimistic and said they hoped that the clearance rate would pick up again this week. They stressed that as of Friday, once the political clamor has subsided and the news of Alberto Fernández’s “resignation” from his intention to go and renew his mandate, the plant was able to purchase $289 million and that the third round of the soybean dollar has already amassed about $1.285 million.
Something that may help Central recover its buying position is if, as happened on Friday, access to the foreign exchange market by banks remains paralysed. Impacted on the latest conference last week was the BCRA’s decision, embodied in Thursday’s A7746 filing, which asks banks to disclose whether or not their importing clients’ suppliers are related to that company.
On Friday, the institutions analyzed the legislation and in practice the market was paralysed. According to Central Bank sources, on Friday 19 banks, “among the most representative”, updated their systems and for this reason they will be able to start operating more quickly from Monday. However, in a survey conducted by clarion from different entities, the expectation is that until The market did not return to normalize its operations on Wednesday.
Beyond the technical aspects, to stop the escalation of the parallel exchange rate it is necessary to overturn the expectations of the market, investors and savers. “We’re in the middle of a race and bullfights stop with dollars and trust. I don’t see the government being able to quickly appeal either of those things,” one operator said sternly.
City analysts agree that after the leap in the financial dollar, with liquidity exceeding $455 on Friday, the “crisis prices” have not yet been reached, which, for example, met after the resignation of the former Economy Minister, Martín Guzmán, last July. But they warned that if worry about speed which has escalated in the last few days.
“The exchange rate differential has reached its highest since Minister Massa took office up to 108%, a value that does not yet denote extreme financial stress. However, the strongly upward trend is worrying since if it continues we could reach levels above 130% as observed in October 2020 (post-quarantine crisis) and in July 2022 (resignation of Martín Guzmán),” they told Delphos.
“The rise was sharp, but it is true that parallel exchange rates were very much lagged. Something similar happened last year in April, when after the dollar had moved calmly between February and March, prices skyrocketed,” said Pablo Repetto, of Aurum Valores.
Repetto has noticed that this time there are several condiments that encourage the leap: “The government has a huge tender ahead of it, $900 billion this Wednesday, the political noise, the impact of the drought and the recalibration of the objectives with the Fund constitute a scenario of greater macro vulnerability and in the face of this the dollar appears as a safe-haven asset. Savers and companies from all over the world are making a “flight to quality” and in Argentina this means more demand for dollars”.
Source: Clarin
