The blue dollar continues to collapse and has already surpassed the $1,000 barrier. To those who are dismantling the “junction” to be able to pay the bills They are offered $975 in the caves. In the meantime, to purchase the quote it dropped to $1005compared to $1,030 on Thursday.
The last time informal stocks traded below $1,000 was late last year. On December 26, it closed at $985.
But from that day until today, accumulated inflation hovers around 35%, which shows that in real terms The current price of blue is lower than two months ago.
The blue reached its peak on January 23, when theit reached $1,255. Since then it has been going backwards.
Why is the blue dollar falling?
“The dollar will no longer be an object of desire, the Argentines are A treasure of 200,000 million dollars, “They will have to use them in 2024 to finance the gap that will be created between income and expenditure”, postulates the economist Salvador Di Stéfano.
The informal dollar is not the only one declining, the same goes for financial dollars. Cash with liquid (CCL), the system of dollarization of businesses, fell by 14% in February, although it increased by 10% over the course of the year. Today he quotes $1,081.
For its part, the MEP dollar, traded on the Buenos Aires Stock Exchange, fell by 12% in February and appreciated by 5.1% during the year, to sell at $1,046. In the two-month period the official exchange rate grew by 4.3%. Like blue, all three are detached from the inflation trajectory.
In fact, parallel contributions from both companies and private individuals are falling They became demanders of pesos in an economy hit by liquefaction that inflation causes on income.
This is reinforced because the market goes through a period of registering higher dollar income due to the liquidation of exporters, with little demand from importers. This lower demand is motivated by two reasons. The first is that, although the government has opened the dollar spigot to importers, it continues to limit access to foreign currency. The second is that due to the recession there is less purchasing power and a large part of imported products remain out of reach of our pockets.
The exchange rate gap narrows
As alternative dollars decline, the exchange rate gap also decreases. For blue, where last October it reached 180%, today it is 22% and for cash with liquids, where it had exceeded 100%, It’s at 28%.
The decrease in the gap in turn accentuates the fall of the dollar, because it conveys the idea that the market is now not willing to dollarize at any price because Expectations that the official exchange rate will undergo a marked correction in the next two months are lower.
From Portfolio Personal Inversions (PPI) they point out that “the main financial dollar accumulates a 33.8% real decline from Milei’s management high of $1,623 reached on January 17. As it was, she sank into his lowest level since the end of 2019remaining just 0.6% above the 2014-2024 average of $1,069 in real terms.”
Is there room for the dollar to continue falling?
The blue dollar tends to move in sync with financial dollars. For analysts, there are no immediate signs of a rebound in these dollars, although they predict that fundamental corrections to the economy will be necessary to maintain stability.
“Although in a very optimistic scenario the CCL would have room to continue to compress, since the average for 2017 (the best year of the Macri administration) is $587“We believe that the foundations for returning to these levels are still missing – underline the PPI -. In our opinion what remains is the delivery of the fiscal results and the presentation of a stabilization plan. Considering this element and the fact that devaluations tend to be very abrupt, we remain cautious towards the “financial speculation on the interest rate”they warn.
However, they point out that “As long as the gap remains at relatively low levels, the liquidation of exporters will continue. Therefore, the flow could beat the fundamentals in the short term, placing a ceiling on the price of the CCL and extending its downward trend.”
Source: Clarin
