He dollar go through hot hours ahead of the primary elections that will take place this Sunday, August 13, and the uncertainty that this generates and the tendency of Argentine investors to dollarize. In that framework, in the last month, the parallel exchange rate increased $109if the quotation of July 10 and the current one of $604. It remains to observe the possible scenarios after the results that emerge from the polls.
Meanwhile, financial dollars are also skyrocketing. He MEP dollar advance $15.40 (+2.9%) to $543.32, after touching $570 during the start of this round; and the dollar CCL rises $3.3 (+0.7%) to $591.70, after scoring a new all-time nominal record intraday last Tuesday of $610.44.
Currently, in the absence of Bookings of the Central Bank (BCRA) and the high levels of inflationthe uncertainty that generates the proximity of the elections. Within this framework, in his latest report, the economist Gustavo Ber “The pressure on the financial dollarsand free, to the rhythm that accentuate the interventions in search of regulating the rhythm of its escalation in the midst of an increasingly generalized dollarization process in the preview of the PASSEDand awaiting the reaction of the operators as of 14-A according to the readings they show”.
The electionswith the support or disapproval that they mean for the different candidates and economic programs, historically have an impact on the economy and on the value of the american currency. You can take the immediate antecedent of 2019 as an example.
In that case, the candidate with the most votes from those presidential primary elections was Alberto Fernandez, who was 15 points ahead of his competitor, Mauricio Macri. The day after the vote, the dollar shot up 23%.
graceful victory of the opposition
According to the economic consultancy roman groupa scenario in which the main opposition space -Juntos por el Cambio (JxC)- achieves a victory of around 15 points of difference over the ruling party, could materialize “a very important rally of Argentine assets until the primary elections in October”. In addition, they indicate that the blow that this would mean for the power of the government could push towards a official dollar devaluationa fall of the financiersseeking to reduce the gap, and the beginning of a monetary adjustment demanded by the International Monetary Fund (IMF).
Opposition victory by less than 10%
From the consultancy they indicate that, in the case of positioning the opposition space as a clear winner, there could possibly be a new rise in Argentine assets and a relaxation of financial dollarsaccompanied by a revaluation of local stocks and bonds. But what if, instead, the ruling party remains competitive, “will try to avoid, at all costs, the devaluation of the officer”.
technical draw
“This serious the worst scenario in the short term for the market”hold from roman group. As explained in the report, this is because the pressure on the financial dollars and downward corrections of local assets would be generated.
At the same time, in this scenario, the consultancy predicts that the possibility of a devaluation would be removed of the official dollar for the search for the ruling party give liquidity to the “pockets”, contain prices and generate an effect of revaluation of real wages in 3 months.
Results divided into thirds
In this stage the chances of victory of the ruling party in the general elections could increase. But within this framework, two paths would open up: that the list headed by javier milei reaches, or not, the second instance.
In the event that La Libertad Avanza (LLA) is left outside the runoffbut with a high volume of votes, it remains to be seen where those votes. According to Romano Group, if the JxC candidate were Patricia Bullrich“naturally you should see an alignment between Milei and Bullrich“and this would create a situation of weakness for the ruling party.
Source: Ambito
