Climb the dollar And political tension does the same. He Exchange band regime faces a defining moment After the recent escalation of the official exchange rate to the $ 1,400 zone.
This level, dangerously close to the roof of the upper band – a project at $ 1,482 by the end of September – marks a critical threshold: for economists – and even for the government itself – there is a dangerous quote, which could shoot the demand and that represents the “No return point”, where the scheme could cease to be effective in containing devaluation expectations.
With the Central Bank of the Argentine Republic (BCRA) under pressure to sustain stability in a pre -election context, The sustainability of the regime is in checkconditioned by restrictions of the International Monetary Fund (IMF) and signs of distrust in the market. The technical design of the bands, with a decreasing floor (-1% monthly, which was $ 950 in August) and a growing roof (+1% monthly, from $ 1,467 in August to $ 1,527 in December), seeks to balance the lean accumulation of reserves with a controlled flotation. However, the rise to The $ 1,400 zone shows limitations of this divergent scheme, which amplifies uncertainty when widening the gap between the ends.
Carlos Melconian and Marina Dal Poggetto mark the “point of no return” of the scheme
The real exchange rate eroded export competitiveness and aggravates a virtual recession. Economists like Carlos Melconian They have been critical of the sustainability of this regime, arguing that The current exchange rate is unsustainable and that does not reflect a free market, but an artificial control that generates imbalances. The former president of the National Bank suggests that above $ 1,450- $ 1,500, the collapse scheme, forcing a post-election devaluation with an adjustment of at least 20%, which could translate into additional inflation of 1.5% initial monthly, cumulative in the short term. Melconian describes it as a “death date” of the modelamplified by errors such as the hurried exit of the stocks and cuts in sensitive areas.
Similarly, Marina Dal Poggetto He emphasizes the appreciation of the real exchange rate, which puts the official dollar in a critical threshold close to $ 1,400- $ 1,450, where additional reserves are missing to defend the band’s roof. Warns that Overcoming $ 1,450 would destabilize the scheme, with revived inflation and need for interventions that could violate IMF clauses, forcing a structural change such as the abandonment of the bands to avoid an uncontrolled devaluation. Strictly speaking, reaching $ 1,450 would imply a break in the government’s ability to manage expectations, since the market would receive the roof as a fragile limit, encouraging bets for a devaluation.
The future dollar as a precursor to the disarmament of the bands
The future dollar contracts In the ROFEX market (today called A3 after its merger with the MAE) they reinforce this perception of fragility, with quotes that anticipate an exchange rate above the official ceilings: $ 1,482 in September, $ 1,497 in October, $ 1,511 in November and $ 1,527 in December, reaching $ 1,500- $ 1,550 by the end of the year. These projections reflect a risk premium that Discount the inability of the BCRA to defend the $ 1,450 Without incurring massive sales sales, which would shoot speculation and drain accumulated currencies.
The proximity of the dollar to this critical level, only $ 50 from the September ceiling, makes each upward movement an alert signal, especially in a context where inflation could be revived. Official sources insist that the Executive is committed to preventing the official dollar from exceeding $ 1,450, prioritizing stability in the prelude to the elections of next Sunday and the national elections.
Among the measures contemplated are specific interventions in the exchange market and a hardening of financial controls To contain speculative demand. However, these actions face a key obstacle: A confidential clause in the agreement with the IMFsigned in April for US $ 20,000 million, which restricts reservation sales to defend the exchange rate. This limitation puts the BCRA at a crossroads: actively intervene in the $ 1,450 risks violating the pact, while not doing so could precipitate an uncontrolled devaluation, eroding the credibility of the economic program.
The Warning of Domingo Cavallo and his proposal
Domingo Cavallo comes from criticizing in the last hours “The improvisations of the economic team“And define a”non -return point“Like the threshold where the official dollar tends to the roof of the band without accumulated reservations to support liabilities of the BCRA. It suggests that above $ 1,450, without free convertibility and prohibition of emission for deficit, the collapse scheme, stagnating the economy or deepening the recession. It proposes to eliminate discretionary controls to neutralize speculation, warning that sales of futures of the BCRA are not enough.
Other economists, such as Iván Carrino or Hernán LetcherThey reinforce the idea of fragility, with future dollar projections above the official ceilings, coinciding that $ 1,450 represents a threshold where the bands lose effectiveness, exposing the government to dilemmas with the IMF, drainage of reserves and political pressures.
In fact, the possibility of abandoning exchange bands emerges as an extreme alternative to dismantle devaluative expectations. Sources close to the economic team suggest that eliminating the fixed roof – which evolves from $ 1,482 in September to $ 1,527 in December – could neutralize the speculation that seeks to force sales of reserves to the upper limit. However, this decision would imply significant risks: A freer flotation could shoot the dollaramplify inflation and hit the positive image of Milei. The $ 1,450, therefore, not only represent a technical limit, but also a political inflection point, where the perception of economic control is crucial for the ruling. From a technical point of view, the rise to the $ 1,400 area and the proximity to the $ 1,450 underline the vulnerability of a scheme that, although innovative, fails to contain market pressures in a high volatility environment.
Source: Ambito
