Tuesday, December 7

Post-electoral dollar: how much could it reach by the end of the year according to the market


The blue dollarStrikingly, it fell below financial dollars and closed at $ 201.5 on Friday. The weekly rise was lower (1.5) and as a consequence, the gap also stood at levels above 100%.

In this framework, today the official exchange rate is the cheapest in the market but it is the most restricted, This creates a great dilemma for investors who continue to distrust the government and their “appetite” for dollarization does not subside.

This week there were signals from the government towards the markets: from the rectification that there will not be a devaluation said by Martín Guzmán himself to the announcement that the “multi-year” economic program that includes main guidelines on the understandings with the International Monetary Fund (IMF ). But so far, it is the expectation and conviction among the analysts consulted for the phrase “if the devaluation is not done by the government, the market ends up doing it. ”

Although it is understood that it is impossible to predict what will happen to dollars because it depends on the movements of exchange rate policy and again, on expectations, we can foresee what could happen in the coming months with dollars – official, alternative and parallel.

“All financial dollars and the illegal dollar or blue dollar were above 200 pesos. There is no reason to think that they will go up or down beyond understanding that today a good part of the market demands those dollars and believes that they will go up. Today these dollars are still seen as cheap but there is analysis that they could continue to rise because there is a shared belief that they will not go down. So that ends up being a self-fulfilling prophecy, “he explained. Martin Kalos, Director of EPyCAConsult.

“The channels to demand the official dollar are counted, outside of that there is this other demand for dollars that he will not stop insisting. There is still uncertainty, nobody goes out to sell dollars. Everyone tries to buy them, it is probable that the demand will exceed the offer and that there will be increases in all its versions parallel to the official one, “he predicted.

In the same sense, the economist agrees Eric Panigua: “The electoral result does not seem to have followed a clear path in economic matters. With everything that happened, the chance of a sudden depreciation remains latent. With this, the dollar is still the classic bet of the bulk of the public “.

Devaluation?

A term that appeared in recent weeks is the “crawling peg” which in simple terms implies a progressive and controlled devaluation of the currency by the Central Bank. It responds to the idea that the devaluation is predetermined and the exchange rate is known in advance to avoid speculation on the currency. Another shared belief is that a 100% gap is not sustainable in the long term and that ultimately what hits the economy the most is not so much the price, but the distance between prices.

In that sense, Sabrina Corujo, Director of PPI explained: “The market is still waiting for a devaluation. It is not clear – and hence the volatility – if it will be via a discrete jump, or an acceleration of the crawling peg. But what is certain , the thing is inflation running at levels of 3%, 3.5% or 4%, is not consistent with a sustained monthly devaluation rate of 1% -1.5%. In this, we believe that there is a coincidence. “

“The gap should narrow – an economy is known (another coincidence) does not work that way in the long term – and this could occur from a combination of a rise in the floor and a fall in the ceiling. From the ceiling, a scenario of less uncertainty, with greater Future policy projection and agreement with the IMF will allow it to be lowered or at least stabilized. We can say that this ceiling is the one that marks the CCL today levels of $ 215 / $ 216. From the side of the floor, what we are talking about … for example , an acceleration of the devaluation rate managed by the BCRA “.

Paniagua agrees but establishes that the devaluation will not be in the short term: “I do not see it materializing in the very short term, due to the fact that the social situation is too fragile to tolerate a discrete jump. A depreciation of great proportions would cause an increase Poverty statistics are dramatic, and I don’t think the government is in a position to bear that cost. However, a moderate correction cannot be ruled out sometime in the next few months. “

Martín Kalos concludes in the same vein with a perspective for 2022: “Somehow the devaluation is gradual or with corrections every certain period of time, it has to occur, aiming more for the summer.”



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