So far, the blue dollar follows inflation this year, the increase in the currency is in the order of 42.5%, while inflation was 42.2% until May. The parallel quote accumulates a rise of $147.
At a time when eyes are focused on political issues and two days after the closing of lists, analysts focus on the negotiation with the International Monetary Fund (IMF) so that he maintains “exchange calm”.
“As the electoral process progresses, especially towards the PASO, the dollarization process will accelerate,” stated the economist Gustavo Ber to Ambit.
In this sense, the economist pondered that “In order to reach the primaries by extending the stage of current relative calm, both in financial and free dollars, it will be crucial that disbursements be brought forward soon and that additional IMF resources are granted for interventions” and pointed out the importance that “through regulations it is possible to continue managing the rate of landslides.”
For his part, the financial analyst christian buteler stated in dialogue with Ambit that “the blue dollar, MEP and CCL have an upward trend in themselves because inflation is around 7-8%” and in the event that there is a dollarization of portfolios, which is recurrent in electoral periods, “That rise is going to accelerate and the Government will try to intervene so that there are no more imbalances in the prices of other goods.”
Despite the fact that this year the increase in the blue dollar is around inflation, in 2022 the parallel currency climbed only one 66.4%under the Consumer Price Index (CPI) that informs the INDEC which was located in the 94.8%. For this reason, the analysts affirm that it is necessary that the currency “does not fall behind” and that it “accompanies the march of inflation.”
When could portfolio dollarization be activated?
Although it is difficult to determine an exact date, analysts point out that one of the mitigating factors for this to happen has to do with the possibility that the IMF does not make advance payments that the Government negotiates with the multilateral credit organization.
“If the IMF does not advance and/or does not provide resources for interventions, I believe that the readjustment times would indeed be brought forward, and there could even be a jump of the order of 10 to 15%, in addition to accompanying the high nominality, and it could even be before the STEP due to the critical level of net reserves”stressed Ber.
Along the same lines, Buteler stated that “some problem with the reserves or with the IMF could accelerate the rise of the dollar”.
And added: “It is impossible to know when it will happen, but most likely it will happen at some point. There are many pesos in the market and it is estimated that part of those pesos will go to cover the dollar.”
In turn, he remarked that dollarization “It will affect the gap, because you cannot go to the official dollar, which is why it will put pressure on the blue, MEP or CCL”. For this, the Government will try to regulate the rise in, “so that there is not a sudden jump or it is as little as possible.”
In turn, Buteler pointed out that the best strategy would not be to intervene in the market with bonds, “It is more efficient to have dollars to be able to sell”although the Government does not have available reserves in the BCRA to be able to intervene, so “the situation is delicate.”
“The Government would have to try to lower inflation and take actions, so that this pressure is as little as possible, because it does not have many tools to become strong and maintain the exchange rate,” Buteler pointed out.
How negotiations with the IMF can affect
Regarding the government’s negotiation with the IMF and the possibility that the multilateral lending organization advance disbursements, some analysts are skeptical and others believe that “I would not be inclined to generate tensions at this stage of political transition”.
“I never saw the IMF advancing funds or giving new disbursements to a government that is leaving. On the contrary, sometimes disbursements have been frozen waiting for the new government with which to sit down and negotiate again,” Buteler pointed out.
In this regard, he noted: “I think that in the best of cases, Argentina can aspire to continue disbursements as they have been until now, despite not having met the goals as they were established.”
In contrast, Ber argued that“The scenario of no disbursements or resources for interventions is unlikely, given that the agency would not be inclined to generate tensions in this stage of political transition.”
Source: Ambito
