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Wednesday, February 8, 2023

The blue dollar accumulates a rise of 6.2% in the year and the lower offer revives the exchange tension

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Thus, so far in January, blue rose 6.2%, going from $346 to $369. On the other hand, financial prices accumulated a rise of 2.3% on average. The CCL had a slight rise of 1.43%, accumulating a rise of $5 since the beginning of the year, and currently its price is $349. While the MEP rose 3.23%, going to $340 from $329 at the beginning of the year, although it still accumulates a gap of $29 with blue.

The Economist Salvador Vitelli He highlighted two key factors that explain the strong rise in the blue in the last two weeks. “In the first place, the little liquidity that there is in the offer. The market is dry due to the regulations that allow foreigners who come to Argentina to settle via MEP, which has an impact in two ways. On the one hand, the Central Bank is no longer receiving dollars through official channels because it is channeled through the MEP, and, on the other hand, it is detrimental to the parallel exchange market, since it takes away a lot of supply. The estimates are between a reduction of 40% and 50% of the usual offer”.

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As a second factor, Vitelli highlighted the delay that the blue accumulated against inflation in the last year. “Inflation was 95% and the blue rose 65%. If we equate to that level of increase, we would have a dollar of $390, which tells us that it is behind schedule in real terms. Compared to stock in pesos, a CCL dollar should be worth $423. And adjusted for inflation, a panic dollar, as we had in October 2022, would trade above $600 today, while, if we compare it with the record reached in July with the departure of Guzmán, it would be equivalent to a dollar of more than $400”.

To Martin Kalos, manager at EPyCA Consultant, “The excess liquidity of the previous months, specifically in December, due to the soybean dollar and the interventions of the Central Bank in secondary markets left a not yet sterilized currency that, in parts, flows towards the parallel channels of the dollar. Another issue is the seasonal demand for tourism, which is added to a search for coverage against a perceived risk in the future given a perception that these dollars were becoming cheaper, because they were not rising as much as inflation, so that eventually at some point moment they will go up Finally, we note that the interventions of some public bodies in the secondary market to contain bond prices in dollars contributed to the evolution that we have seen in the last days of the parallels”.


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The prospects in the market are bullish. On the one hand, Alejandro Giacoia, economist at Econviews, considered that “going forward I believe that the Qatar dollar is a reference for the blue. You can move in that area. I think the financiers are going to be subject to what happens with the elections and the debt market”.

On the other hand, Vitelli highlighted: “As the demand for money falls, it will have an even greater impact and will generate more pressure. Demand is currently high, but in February it will begin to fall and there we will see an additional rise. Added to this factor is a shortage of dollars due to the drought. The Buenos Aires Grain Exchange was estimating US$11.6 billion that will be short this year. Personally, I believe that the lack of dollars is going to be greater, because there are few crops and those that do exist are in deplorable conditions. Given this factor, we could be going to a loss of base liquidation of about US$14,000 M”. “This -he added- translates into less firepower for the Central Bank to contain some type of heating in the exchange market.”

Source: Ambito

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