Unfolding or exchange jump: what City analysts think about getting out of the financial crisis

In just six shifts in July, accelerated by the high uncertainty caused by the slamming of Martín Guzmán’s door and the fighting within the Fernández-Fernández duo, the Counted with liquidation, it jumped more than 19% to add nearly a 49% increase in its price since the beginning of the year.

Although the central bank accelerated in the last few wheels its daily rate of depreciation of the weight, the gap between the free dollar and the official dollar is above 125% and shows the urgency with which action should be taken to stop the race against the weight.

The Fernández government has already gone through a financial crisis of similar characteristics – in October 2020, when the liquidity price with liquidation rose to what would be today’s values ​​of $ 400 -, and then he managed to dominate the gap without validating a decent jump in the gearbox.

But analysts agree that the current situation is one of them greater fragility and that it will be difficult for a newcomer Silvina Batakis to stabilize the financial variables. “The different faces of the economy that Batakis has received are on highly unstable ground, with serious short-term challenges and difficulties ahead,” warned consultancy Invecq.

“The alarms went off before the second half of the year less harmonious for the economy as a wholeboth in real and financial terms, and the firm belief that a simple change of name but obviously not enough to reverse the danger “, they explained.

With fewer reserves and more tax pressure, added to the greater uncertainty about the Treasury’s ability to continue to finance itself on the local market, the current margins for the consultancy firm Ecolatina ” seem more limited than in the other episodes “: “The cost of experiencing an exchange rate jump is also higher – when inflation is sailing at 80% rather than 40% / 50% – reinforcing and helping to understand the current” lockdown, “they warned.

In 2020 Guzmán was able to stop the crisis by appealing to “measures favoring the supply of dollars in the official market (temporary reduction of withholdings), a small acceleration of the devaluation rate and a more austere fiscal policywhich provided for the return of transitional advances to the Central Bank “, they reminded Delphos.

“These measures had an effect on expectations and the gap is 100% broken a few weeks later”, they said, stressing that in the current scenario it is not possible to apply this recipe. “because there is no adequate political support”.

“We expect this gap level to be more persistent than in the past, with the known negative effects on the official foreign exchange market and an increased need to accelerate the crawling peg,” they pointed out in the advisory.

Traders agree that although the official exchange rate appears lagging, the free dollar “came forward” and that, although the government is reluctant to validate a decent jump in the official dollar due to the inflationary impact this could have in an economy where the annualized CPI increase is already about 80%; They also warn that the options are limited.

For Fernando Marull, of FMyA, “openness is part of the tools available, but should be part of a coherent set of measures “. According to the economist, if high issuance, exchange rate appreciation and domestic politics are not controlled; a divided market “can present the same problems as the current regime (few incentives to settle in the” commercial “market, high and volatile gap, among others).