At first glance it wouldn’t make sense.
In the midst of the Central Bank’s purchases of foreign currency (which have exceeded 7,000 million dollars since December), the president Javier Milei He insists practically every week on the idea of thedollarization of the economy.
Even though he went on to say this it wouldn’t be this yearand the technicians underline that in order to materialize the government would need a sum of between 20,000 and 40,000 million dollars (it is worth remembering that the net reserves of the central system are still negative). or a bi-monetary scheme it could be closer.
There is a current of analysts (this week the economist and historian Pablo Gerchunoff focused on this possibility) who believes that if inflation does not fall quickly, Milei could opt for that Dollarizing exit towards the middle of the year, when the release of stocks for the payment of imports progresses.
Other topics to explain The decline of the blue dollar (it closed at 1,070 dollars, losing 0.7% for the week and 15% from the peak of 1,255 dollars in January) is part of the blow to pockets and the fall in the purchasing power of families due to the inflationary leap following the December devaluation.
Families overwhelmed by the price run-up turn to theirs savings on tickets be able to get through the first quarter, thus supplying the retail foreign exchange market.
It also helps explain the calm exchange rate communication Larry Fink with President Milei and his promise to travel to the country in May. A meeting that market operators followed carefully and with particular attention.
Fink is the CEO of the powerful investment fund Black rock who was already in town in other times, when Luis Caputo He was president of the Central Bank and his investments had mixed success.
Now Fink has decided to buy some of the Bopreal bonds that importers are buying to repay foreign debts.
The amount disclosed for the operation was very low (1.8 million dollars) but some analysts risk it being multiplied several times. Any move by BlackRock is followed closely for a market that is experiencing a wave of optimism these days.
The rise in dollar bonds over the past two weeks has been astonishing: Bonar 2030 (AL30) improved by 8.8%the GB30 at 6.5% and there were variations in the weights linked to the CER which increased by over 12%. A bond “mini-party” about which many market operators remain hopeful.
At this point the question arises spontaneously about the rise in bonds, which would be a signal of confidence for the Government. The question is: The improvement responds to Milei who says he wants todollarize or to the action of Minister Luis Caputo who assures that there will be a fiscal surplus Even as the fight with governors over the funds to be shared intensifies, will it be up to the markets to make the music they want to hear?
The decline in free dollars and the increase in bonds are two tangible results Something is changed, he joined the delegations of foreign bankers (from Barclays and Citi) who hold meetings with the Government and economists interested in analyzing the possibility of investments in Argentina.
In the meantime, we are starting to bet on the decision that the president and the minister will make on the official dollar (the wholesale one is at 835 dollars) starting next month.
Until now, the official dollar rises 2% monthly in a transitional scheme that aims for a dollar that lags inflation so that it serves as an anchor for the price of food.
Financial operators hypothesize that, finally, Caputo could decide to follow a creeping but more accelerated peg (8/10%? monthly) But in recent days that speculation has refocused towards the possibility of a 15/20% “jump” and then left the dollar at a standstill..
These are only possibilities for the end of February, but they fit into a particular scenario, despite realizing one the unwritten golden rules of the Argentine currency market: The dollar falls when it sees that the Central Bank buys dollars and gets opportunities to operate on the market.
There is more dollars and fewer pesos in a recessionary context in which families must resort to their savings to cover the needs that arise every day.
Source: Clarin
