Luis Caputo’s “Summer of Foreign Exchange” continues and the financial dollar fell again this Tuesday: cash-with-liquids fell another 1%, closing at $1,087which led to the gap with the official dollar drill 30%, the lowest value since January 3rd. In the city they believe that if the 2% monthly scheme is maintained, the gap could narrow further.
So, since Javier Milei arrived at the Casa Rosada, lThe gap narrowed by more than 150 percentage pointsforced first by the jump in the exchange rate on December 13th, which contracted it “from the floor” and then by the effects of the change in monetary policy that Caputo implemented together with the president of the Central Bank, Santiago Bausili, which served to modify the dynamics of the foreign exchange market.
On the one hand, the politics of liquefaction of savings, with rates negative relative to inflation and less monetary output, forces households and businesses to shed their dollar positions to meet their peso needs, which increases supply in the parallel market. This is also favored by the “blend” of the export dollar, which allows 20% of payments to be made on the financial market.
At the same time, according to the Central Bank, the demand from the importing sector in the parallel market has shifted towards the official segment normalized access to the dollar for these companies. This phenomenon has not yet made itself felt strongly, but it has nevertheless eased the pressure on the financial market. In the MULC, Central purchased this Tuesday another $142 million, which corresponds to total purchases of $8,530 million since December.
Therefore, the currency gap maintains a bearish logic for now which could extend throughout the remainder of the first quarter of the year. Martín Polo, Cohen’s strategist, said: “We believe that until April the gap should remain under downward pressure or at least stable, because we are in a context of oversupply in the parallel market, while much of that demand feared being one of the importers due to the overdue debt, would not be able to overcome the effect of that offer.
For his part, Sebastiano Menescaldiof Eco Go, warns: “Today we see this approach to exchange rates, in a context where the financial repression It hasn’t changed from what Massa did at the time. I intend, “The entire stock is almost fully operational.”
Analysts believe that the gap can still narrow further, but this exchange rate unification is still a distant scenario. “It is good news that, amid the political chaos, the exchange rate gap continues to decrease or remains at the minimum level of 25%, but it is not enough to talk about a possible unification of the exchange rate. On the one hand, the Bank Central has managed to purchase reserves because imports are still paid in installments. On the other hand, there are still too many pesos in circulation to allow us to think about opening the stocks,” he said. Martino Polo, by Cohen.
In this same line, Adrian Yarde Buller, of Facimex Valores, pointed out: “Unifying the foreign exchange market with negative net reserves is difficult even if the exchange rate gap is low, because it would imply living with a flexible exchange rate without a nominal anchor for expectations.”
Finally, Menescaldi stated: “I still don’t see that we are getting close to unification. All this also taking into account that there is no financial stability, there is no confidence in the peso, the reserves are still negative. The truth is that there are many things and many uncertainties that also follow from this.”
Source: Clarin
