This is indicated by several fund managers. Some estimate 8% for next month. Faced with a “frozen” BCRA rate, CER-adjustable instruments and “hard currency” options charge interest.
This is not just an expression of wishes from the economic team that the Inflation will ease a little after the 32-year record August, when the CPI rose to 12.4%. To reach double digits, the transfer to prices of the 20% devaluation after the primary elections had an impact, in addition to the inertia of the prices that came beforehand. The vice minister Gabriel Rubinstein points out that in September it would slow down, taking into account some numbers from the first week of this month, although private estimates indicate the opposite. For the market, the retraction could be important in Octoberas long as the Central Bank manages to hold the official exchange rate until the presidential elections.
A stock company report MegaQm forecasts for the tenth month of the year a sharp drop in inflation 8%, if compared to what happened in August. They reach that conclusion by trying to estimate how much of last month’s CPI was due to the pass through.
The report from MegaQm, the fund manager that belongs to the GST financial group, calculates that the 12.4% in August was composed of a 2.3% carryover from July and a net inflation of 10.1%. In September, it estimates that it will be 13%, with 7.4% carryover and a net of 5.6% (which would mark a deceleration). Already By October the fuel for the devaluation would run out and it would remain at 8% with 2.4% carryover and 5.6% net. The alyc maintains that, since the inflation measured by the INDEC corresponds to a monthly average, the inflation figure for August only has the effect of the middle of the month. “If this trend towards deceleration were confirmed and no new shocks occurred, the October CPI could be located one step below, returning to single digits,” the report explains.
For the market the data is not minor. With that It is estimated that the real exchange rate for the October elections would be 20.3% below that achieved after the devaluation, from which he concludes that the government would have to make another discrete leap of the same magnitude. So, CER bonds are going to be exceeding the yield of the Central Bank rate. “Given these levels of inflation and the fixed exchange rate strategy, We see it as highly likely that investors will increase the level of coverage of their portfolios in the coming weeks, both in terms of exchange rate risk and inflation risk,” says MegaQm.
Another alyc, GMA Capitalpoints out that “for September the CPI is expected to rise 12%, while In October and November there would be a small deceleration of 9.1% and 9.4% respectively”. By December with the change in management there would be a new advance of 13.2%. “For none of the next six months is inflation expected to fall below 9% monthly,” says GMA Capital. The brokerage company considers that “The search for hard currency coverage will probably accelerate in the run-up to the elections” and warns that “the fact that the rate in pesos is not competitive could even advance the times.”
The consulting firm Ecolatina also considers that there is a carryover effect. “For the second half of the month (September) we expect a moderation in the speed of prices, but that would not prevent our CPI from being above 11%,” he indicates in his latest weekly report.
Source: Ambito
