The strong jump of the official dollar in July promoted the actual multilateral exchange rate (TCRM) And, as a consequence, Argentina’s competitiveness improved with the main commercial partners. After an appreciation in the summer that generated a strong output of tourism and a current account deficit, Economists point out that the current scenario looks more balanced and even “healthy” for the economy. However, they warn that warning signs persist.
According to data from Central Bank (BCRA)the actual multilateral exchange rate was at the end of July at 98 points, its highest level since April 2024 and very close to the theoretical balance threshold of 100 points established based on December 2015. “This level is key to correct imbalances in the exchange of goods and services with the outside”he said Ignacio MoralesChief Investments officer, from Wise Capital.
In turn, the economist Lorenzo Sigaut Gravina This information was also echoed and provided that, after the strong climb of the dollar in July, The TCRM even exceeded equilibrium floor mentioned by IMF Staff in the new agreement (delay of between 15% and 25% in the first quarter of 2025). “After flotation, the TCRM improved 20% and for now the ‘pass-through’ is very low,” he said.
More competitive dollar: Why is it more “healthy” for the economy?
How it was mentioned above, One of the consequences of the dollar shooting during the last month was the variation the real exchange ratewhich is a way of measuring How expensive or cheap is the country. “Just in the summer months (where tourism has positive seasonality) The TCR was in its lowest values in the Milei era. That motivated that many people who used to vacation in the country have gone abroad“They recalled from Econviews.
Now, they held from this consultant, in terms of competitiveness “The situation looks better.” “To begin with, the Central Bank does not intervene (directly) on the change market. Do not defend more parity that it does not lose dollars that were demanded, for example, to travel outside,” they said and that to this is added that From the partial lifting of the stocking the real exchange rate improved 24%.
“In this improvement it has a lot to do with the rise of the last days. The speed of the rise may not have been ideal, but we are the idea that this exchange rate level is healthier for the economy, ” They explained and were for more to maintain: “Although it clashes with the story created by the government where the exchange rate had everything to go to the band of the band, This rise gives more sustainability to the scheme. Returning to tourism data, with this dollar we see that the worst has already happened and some improvement in the tourism account has begun to register, reducing the current account deficit “.
In talk with Scopethe economist Federico Glustein He also contributed: “This index shows that if it is high, Argentina has a competitive value of its economy compared to another coin basket, that is, with other economies, so We can think that it is healthier, however, there is still a section that allows to recover this characteristic competitiveness of the Argentine economy and the export of commodities. This means that there is still a strong presence of imported, more dollar demand for foreign tourism and savings among others. We are still below the historical value and necessary to avoid exchange runs. “
How was the evolution of the TCRM and what to expect in the short term
From the minimum reached on April 8on the eve of the elimination of change controls for human people, The multilateral real exchange rate (ITCRM) increased 25.1% to the present. “This Underground is also the byproduct of a rise in the real bilateral exchange rate against the United States of 18.6% and against the rest of the commercial partners of 26.4%, which shows that the appreciation of these countries also played in favor in the profit of competitiveness,” they explained from PPI.
With the rise in July, as mentioned above, the ITCRM reached its highest value since the end of April 2024. “It is worth clarifying that the key will now be to monitor The magnitude of the pass at prices of the recent rise in the nominal exchange rate in August, which will partially erode this improvement “they alerted from this broker.
In talk with ScopeSigaut Gravina explained: “The exchange delay or the strong appreciation of the currency we had has been significantly morigue. In the graph there are three levels, the red $ 1,310, minimal that the IMF that is close to the equilibrium, is close to the equilibrium, maximum are $ 1,482, and $ 1,650 is the historical average. If you are under the red line you are with very significant exchange appreciation“
He mentioned that the consequences could be seen in the tourism deficit, and today at least “a part was corrected”, which helps some sector to work better. “Argentina has to pay many debt maturities in hard currency, you have to rebuild reservations, it continues with negative net reserves, although the IMF relaxed the goal, this situation is not desirable. The TCRM at levels between yellow and green is more comfortable and more sustainable. There will be to monitor inflation. We are better than with the ‘Crawling Peg’ at 1% and part of that correction has been done, “he closed.
Source: Ambito
