The summer of exchange rates seems to continue vigorously into the second week of March. While the market wonders if the Central bank will accelerate the pace of the monthly devaluation of the official dollar, the parallel dollar does not stop recording new declines. This Wednesday, blue reaches $995$15 less compared to the previous close and the lowest value since December 26th.
What happens on the street with American law also reflects the behavior of the United States dollar in the bag. Liquidity with settlement, the method used by companies to materialize, has already lost almost 4% in the first four rounds of the month and is close to $1,030. The dollar MEP, or stock market, also trades below $1,000 and stands at $998.
“Financial dollars continue to fall and blue accompanies this movement”, explained a City operator. “There is an expectation that liquidation liquidity will reach $980 in the coming weeks and the blue could go looking for a price of $950. In any case, these prices seem to warn of the possibility of a rebound,” he added.
The peso’s appreciation is based on some circumstantial market factors and a change in short-term expectations.
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Adorni illustrated in detail the reaction of the markets after President Milei’s speech to Congress.
The continuity of the dollar blend
The 80/20 export scheme established by the Ministry of Economy in the second half of December, under which producers They can pay 20% of its exports on the financial market, continues to deflate liquidity with liquidity.
Even if it is true that the fall of the financial dollar and the reduction of split makes it no longer so attractive for this sector to liquidate in this segment, since the dollar exported to the official market is currently at 993 dollars, the supply of dollars is still maintained.
“In the market there is a very strong offer of exporters, which is not counterbalanced by private demand for hedging in a context of relative stability of Latin American currencies and optimism for the latest government measures,” they explained to Delphos.
Waiting for a political agreement
Although the failure of the Omnibus Law has brought some volatility to the financial market, the wait for a new agreement between the Casa Rosada and the provinces fuels a prospect of “tranquility” on the financial front, at least in the short term.
“The latest news on the dialogue between the national government and the governors has created positive expectations that help the peso by generating favorable conditions for the carry trade,” they added to Delphos.
Central Bank accelerates crawling peg?
In view of the liquidation of harvest, The question remains on the market whether the Central Bank will decide to increase the monthly inflation rate. set at 2% since December. “Operators are alert to a possible gradual acceleration of the pace of “creeping peg”, something that is expected to happen soon in order to extend the accumulation of reserves and thus mitigate the loss of competitiveness as the effects of the initial devaluation fade over time,” economist Gustavo Ber said.
“The government seems to give priority to the anti-inflationary effect of exchange rate pegging in the face of the possibility of accelerated appreciation of the official dollar which could reduce export price competitiveness,” they told Delphos.
On Tuesday there was a movement that drew attention to the wholesale market, where the Central Bank exited run to the official dollar at a greater rate than in previous days. “In the first two days of this week the wholesale exchange rate rose by $2.50, a little above the increase of $2.20 in the same period the previous week,” explained trader Gustavo Quintana .
However, consultancy firm Outlier warned that the movement was due more to technical reasons than monetary ones.
“Yesterday the operators raised alarms because it seemed like this the BCRA had increased by $1 the price on the official dollar market, which represented a TEM increase of more than 3.5%. However, one issue is not taken into consideration. From 1 March the MAE has modified the parameters of the TIC Tac minimum price which no longer allows operation in 10 cent sections, but moves to 50 cent sections”, they explained.
“Therefore, the BCRA cannot make the daily increase of 60 cents that would correspond to the monthly crawl of 2%, but rather must proceed at the rate of a jump of 1 peso every five days of 50 cents. Today we will see if the BCRA will return to the 50 cent position like Monday and Friday,” they concluded.
SN
Source: Clarin
