The PASS is closer, more tension builds up in the foreign exchange market. On the contrary, political uncertainty does not help to calm the financial climate in general and the question of the dollar in particular. Above, in a scenario where everyone knows the Central Bank has it every time less firepower to cope with buying pressure.
So far in May the official exchange rate has increased from $222 to $232 (+4.5%) and the Cash with Settlement dollar has increased from $453 to $495 (+9.2%). The gap between the two prices reached 112%. Context: May inflation will be close to 9%.
There were sparks in the dollar market on Thursday. The Central Bank (or the Economy, it doesn’t matter) had to stop intervening with bonds because an important round had taken place where Millions of dollars had gone. Millions from a portfolio – net reserves – that are already negative.
Faced with this, on the eve of a financial week that promises to be interesting, it is worth asking whether the Government will adopt some change of strategy, or maybe if you accept “publication” some of the exchange rates you fight against.
With inflation accelerating to double digits a month, the question is whether the central bank will continue to use the official exchange rate as an “anchor”. And on the other if they resign themselves to the consolidation of the exchange rate gap well above 100% and growing.
The last two episodes of very high gaps have been traumatic. October 2020 hit 140% and forced CFK out with a letter asking something like “do something”. The June 2022 bullfight (130% gap) culminated in the resignation of Martín Guzmán via Twitter.
Carlos Pérez, of the Fundación Capitalunderlines that the Government has set itself objectives which it can partially achieve. “There are things you want and can do, and others you want but can’t get. There are others that she wants, but we don’t know if she will be able to specify or not “.
Among what he “wills and can”, says Pérez, is to avoid a default on Treasury debt in pesos, financing himself with the BCRA and at the cost of higher inflation.
The “I want to, but I can’t” heading is intended to avoid a recession and almost uncontrolled price increases. “The rules for monetary issuance are not yet available,” he underlines.
And finally, says Pérez, “what he wants but we don’t know if he will succeed” is to avoid a greater devaluation than that seen so far. “45 days ago we said that the difficult phase of the year was between PASO and the change of government. This has been anticipated and we are already in the midst of the turbulence.”
Pérez explains that at Fundación Capital they use a ratio of monetary liabilities to net reserves to calculate an appropriate price for the dollar that goes into liquidation. “It gave us $530 when it was trading at $430. This Friday it gave me $580 and in the market it is close to $490. My impression is that they are scratching the bottom of the pot. But I’m inclined to think that they contain the official exchange rate by stopping imports at the cost of another recession”. Finally, Pérez sees it very difficult for the IMF to agree to advance disbursements, not without a firm commitment that there will be an advance devaluation of the official exchange rate.
Andres Borenstein, of the consultancy firm Econviews He noted that, on the one hand, the devaluation of the official exchange rate must approach inflation, because further delays become unsustainable. And in relation to financial dollars, he warns, like everyone else, that there are not many reserves to intervene in cash with liquidity or MEP. “In the official market you stop imports and you make it. But in the other, selling in pesos and buying in dollars is already uphill, there’s no respite to disburse 60 million dollars a day». -Do they clear cash berths with liquids?
– I don’t know if they will let go, but they will intervene less.
– And will the dollars they ask for from the IMF arrive?
– I do not exclude that the IMF, perhaps at the suggestion of the United States, releases even just a part of what Massa asks of them.
At the same time, Martín Polo, of the Cohen Stock Exchange company, He noted: “It’s all very volatile. The pattern in April and early May shows that the rate of devaluation has eased slightly. And as far as cash and cash goes, they did something logical and stopped burning so many reserves. I believe we will open the exchange rate gap between the CCL dollar and the MEP. Financial dollars cannot be expected to skyrocket, but there is undeniable upward pressure. In particular, I think it is highly probable that financial dollars will outpace inflation and interest rates from now on.”
Diego Saravia Tamayo, from Proficio, He stated that “It is clear, the momentum of financial dollars is on the rise. We also know that the Government would like the variables to move as they want, even defying the laws of physics. But the reality is that there is a lot of distrust, a lack of credibility, a lack of useful measures, a lack of nominal peg, a lot of issuance. This translates into a government with little firepower but inventiveness in placing restrictions… so how long that will last is impossible to say. What I don’t think is that this week’s dynamics say much about whether the government has “dropped anchor”.
Finally, Esteban Rugna, CEO of Liebre Capital, we recall that “In the years of the elections in Argentina, the pressure on the dollar is current currency. The situation deepens this scenario. The impossibility of accumulating reserves in 2022 with the great performance of agricultural exports, inflation with rising levels, the drought of this campaign and the chronic difficulty of adjusting state spending to income are the faithful reflection of the concern for the price of the Argentine peso. Movements in investment portfolios seeking to hedge themselves in hard currency or inflation-linked securities are increasingly evident. “
Source: Clarin
