However, in recent days, the rate of devaluation of the peso seems to have moderated. Thus, although Albornoz considers that “it is understandable that they accelerate the crawling peg in a context of the soybean dollar due to the patrimonial impact of this new Export Increase Program”, considers that it is expected that he will not take it to such a high level.
The soybean dollar gap II: a key variable
What the economist refers to when he talks about the patrimonial impact is the fact that the BCRA buys dollars at $230 who liquidates soybeans and sells to importers at an exchange rate of approximately $170. “The difference between what it issues to buy and the pesos it receives when selling implies a loss of equity (buying high and selling low), despite the fact that foreign currency is accumulating,” says Albornoz.
Consequently, If agriculture liquidates the US$3,000 million that will be agreed upon and the BCRA sells US$1,000 million to importers in the same period, we would be talking about an issue of more than 11% of the pre-dollar soybean monetary base 2. “If this is not absorbed with Liquidity Bills (LELIQs) and repos, it is a mass of liquidity that will directly or indirectly put pressure on exchange rates,” he warns. And, according to Albornoz’s vision, “that is why the Central accelerate the crawling-peg, to close that gap” of the soybean dollar 2 and that the direct monetary impact is as little harmful as possible.
However, Lucio Garay Méndez, an analyst at EcoGo, believes that “in the variable dollar of the economy, there is a dilemma formed, on the one hand, because the real exchange rate is lagging and ideally the devaluation would have to run above the inflation and, on the other, because, although the official dollar is less and less a reference for the economy due to the continuous unfolding, it still has an impact on prices and indirectly on purchasing power”.
Given this scenario, he mentions that the BCRA began to slightly slow down the movement of the exchange rate: as stated, the first week of the month ran, it brought it to 7% per month, the second, it did it to 6% and this Monday, at 5.6%.
Slowdown in crawling-peg: is it a trend?
Consequently, according to his view, “It is expected that the dollar will begin to move at a slower pace”. The big question is whether it will do above, equal to or below the inflationwhich began to slow down in November, when it was at 4.8%.
With this panorama, Caprarulo states that “the question for the coming months is posed by two variables: the first is whether the slight low on inflation will tempt the government to step on the exchange rate to boost wages measured in dollars and in turn take pressure off the evolution of prices in the economy and the second is that the lack of dollars in January and February counteracts this possibility, putting more pressure on accelerate the crawling-peg”.
According to Analytica’s vision, this last factor will be the one that will have the most weight in the dynamics for the coming months, so it is expected that the official exchange rate will continue running at a rate of around 6% per month, beyond the data of inflation and analysts do not rule out that it will accelerate a few percentage points towards the summer.
As Garay Méndez warns, this does not help prices to converge at a lower level, but it is an advance in the process of reducing the exchange rate gap in the future to which the Government aspires and is an element that contributes to favoring the balance of losses and income from reserves to the BCRA in the process of payment of imports and liquidation of exports.
Source: Ambito
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