The Santiago Bausili – Luis Caputo duo kept the promise made in December and maintained the devaluation rate at 2% per month during the first quarter of the year. Therefore, the exchange rate remained virtually unchanged, with inflation expected to exceed 55% in the first three months of the year.
The “exchange anchor” has caused the dollar’s evolution to move far behind the rest of the economy’s prices: as of today’s close, the wholesale dollar has moved just under 6% since January. Now, $856.50 is equivalent to the $350 it cost after last year’s general election.
The government also managed to ensure that parallel dollars have minimal variation in the first three months of 2024: although this Tuesday the cash with settlement recovered 1.7%, in the cumulative value of this year this price gains 12 .7%; while the MEP dollar has moved just 3% since January.
The real multilateral exchange rate, i.e. the comparison of the peso with the currencies of Argentina’s main trading partners, It returned to the level of September last year, after Sergio Massa’s post-PASO write-down took the wholesaler to $350.
However, Matías De Luca, economist at Empiria, said: “It should be borne in mind that the exchange rate published by the BCRA is not a 100% reference, since we still have multiple exchange rates (importers have an importer-official dollar + COUNTRY tax- and exporters the mixture -80% official and 20% CCL-)”.
In this sense, he highlighted: “the exchange rate for importers is 1,000 dollars (a competitive level, similar to that of the second quarter of 2019) and in the case of exporters the situation is different, given that today they receive a rate of less real exchange than they received in 2023 (with all the ‘exceptionalities’ that soybeans and the agricultural dollar entailed).”
Despite the “loss of competitiveness” of the peso and despite the devaluation shock of December, in the city it is believed that, even if with fewer incentives, starting from next month we will begin to see agricultural liquidations. “If it continues to crawlexporters will receive less revenue than during the Massa period, in addition to the drop in international prices,” warned Sebastián Menescaldi, economist at Eco Go.
Along the same lines, Pablo Repetto, of Aurum Valores, explained: “The incentive for producers to sell their harvest is to cancel the debts and problems left by last year’s drought.” However, the economist warned: “I’m not convinced that at this exchange rate there will be an avalanche of currency selling. If the CCL starts to rise, that could happen.”
Exporters benefit from the 80/20 regime, which allows them to settle 20% of their sales on the financial market. But the reduction of the currency gap, currently around 28%, reduces the incentive for the export sector to operate in this market. The country has also committed to the Fund to eliminate this dollar blend before June, which increases uncertainty on the exchange rate front.
“The continuation of this level of appreciation would also increase the risk that at some point we will have to make a decent jump in the exchange rate. If that moment were to arrive there would be new negative consequences arising from unnecessarily supporting a real exchange rate that formerly The place it will remain an unrealistic test given the precarious economic context inherited”, warned Repetto.
Source: Clarin
