The dollar’s escalation affects business costs and increases price pressure

The leap the blue dollar hit today when it hit an all-time high from $ 302as well as the surge in financial dollars on a hectic day for the markets, it did nothing but double the inflationary pressure which already reaches 64% per year.

In July the retail price index, not yet officially known, would have reached a 7% plan, according to advisors, due to the previous rise in the currency – when former minister Martín Guzman resigned – and the tightening of stocks. Yesterday the shock of the city threatened inflation again: free dollar increased by $ 10 in hours; touched $ 302 and closed at $ 301. Y the CCL dollar, even that used by companies to obtain foreign currency has risen and reached $ 304.

Prior to this escalation, consultancy Eco Go estimated inflation for July to rise by around 6.2%. Regarding this forecast, economist Sebastián Menescaldi explained that “The recent rise in the dollar adds pressure to prices over the month, so much so that the greater tension on exchange rates has been transferred to prices. Today, in our view, we are seeing strong increases in recreation (which includes computers and other imported products not intended for the home), equipment for the home and accommodation and we do not rule out that they are superior, ”he says.

According to the economist, “the key question will also pass the transfer of the increased exchange rate expectation to food prices, which accelerated but to a much lesser extent ”. And she added, “something you can see is that part of producers and importers had to raise their prices to incorporate the cost of coverage. “

On this point, the economist Martin Kalos, of the EPyCA consultancy firm elaborated: “the issue of the incidence of parallel dollars – until a few weeks ago – was relatively minor. However, since the communication from the Central Bank postponing access to the foreign exchange office to make payments for imports and then obliges them to finance those dollars at the parallel exchange rate, now yes, it has an impact on the cost structure of many companies “.

“This leads many of them to not being able to afford imports. Also to the uncertainty of continuing to operate as they have always done because they do not know the replacement costs of imported productsHe says. “So protecting yourself from this uncertainty is what led to the missing prices And when those prices reappear, they come back with increased prices, “he summed up.

With a similar explanation, the consultancy Ecolatina estimated that retail prices were recorded an increase of 7.9% in the first half of July compared to the same period of the previous month. This pricing took place “in a context of high financial volatility that resulted in parallel dollar increases, import restrictions imposed at the end of June and high uncertainty over replacement costs,” he described.

Based on this estimate, Agostina Myronec, of Ecolatina, says: “We expected a slowdown in the second fortnight which would make the monthly number slightly lower (+ 7.5%). However, we may not see it. At least, the second half of the month, it will likely have a similar impact to what the first fortnight was, “he said.

Yesterday INDEC reported the evolution of wholesale prices, which tend to anticipate the trend in consumer prices. In Junerose by 4.8%. In this way, during the first half of the year they accumulated an increase of 34.9% and, in in the last 12 months the increase was 57.3%, slightly below the general level of inflation.