how the market will open after the result of the runoff

how the market will open after the result of the runoff

Javier Milei was elected president and with this result A series of unknowns opens up about what will happen during the transfer with exchange rates. There are 13 wheels left and the questions that are circulating during these hours are will he continue crawling peg Or will a devaluation of the official dollar be validated? How will financial exchange rates react? Will there be an exchange rate unification towards the end of the year? Ambit It was proposed to analyze with important references of the city the first reactions that they believe the exchange market will have this Tuesday, November 21.

The keys you need to know for tomorrow

He Government will extend until December 10 the export incentive scheme that expired this Friday. The decree that will be published this Tuesday in the official bulletin will increase the portion to 50% currency that can be settled in the dollar segment Cashed with Settlement. At Friday’s close, the calculation rounds out an exchange rate of $614.

At the same time, It is expected that the Central Bank will not stop intervening in the bond market. As for the Lediv, bills of the BCRA, an instrument strongly in demand in the run-up to the elections, this alternative will be eliminated for exporters while Financial institutions may subscribe to Lediv on behalf of and on behalf of the importers.

Official dollar and parallels, between uncertainty and pressure

For Claudio Capraruloeconomist and director at Analytics“regarding what may happen with the official dollar, it seems to me that there is a political decision on the one hand and, on the other hand, there is a decision that is directly related to the material conditions. We all knew that the policy of crawling peg The 3% monthly rate proposed by the Government seemed very complex to carry out. The amount of international reserves what’s in it Central bank, the economy nominee with the inflation rate made it very unlikely that a process of exchange appreciation could be sustained“.

The economist also explained that a period of “uncertainty while the president elected as of December proposes dollarize the economy”, this puts strong pressure on the official exchange rate from tomorrow. “The parallels surely feel it too”he said although he clarified that we must finish seeing what the market reading is regarding the statements that Javier Milei has had during these hours and what his margin of action is from now on.

“If it poses a shock scenarioor if, as he said, he will first resolve the quasi-fiscal deficitthat is, the debt of Central Bank bills, the Leliqsor if after that you are going to think about “the disarmament of the exchange rate”Caprarulo explained but stressed that he believes that these measures speak of a shock plan but with certain gradualism and if this is finally the case, he anticipated, “Therefore, the market reaction tomorrow regarding parallel dollars is not as strong as expected”. Finally, he said that we also have to see whether or not the Reserves continue to be used to intervene until the transfer.

For its part, Amilcar Collanteeconomist CESURalso in a conversation with this medium, said that “what I understand is that Javier Milei’s team wants to go quickly to a unification of the exchange rate Therefore, in this transition, it is likely that at least imports and exports will become equal. A few days ago the dollar gave 70/30 to the exporter an exchange rate close to $500“.”Most likely, the dollar at 10/12 will be close to that number. The problem is that if they move the official dollar quickly without a plan behind it and a government with little political support, prices can skyrocket,” he warned.

And he added: “The gap will more than anything reflect whether the intention to dollarize is in force. If they reinforce the idea of ​​dollarization during this transition, financiers can rise and widen the gap. On the other hand, if you opt for a plan agreed upon with the PRO and Together for Change, a traditional but consistent stabilization plan (which would imply a monetary, fiscal and exchange adjustment), the gap can decrease.”

Market projections on the dollar

To its turn, Salvador Vitellifinancial analyst Romano Grouphe told Ambit: “The exchange rate can be put heavy because of how Milei has suggested that there are devaluating expectations. It will be difficult at this time of transition to generate liquidations. Today what is in force is the official dollar but there may not be as many liquidations of exporters then it ends up being a fairly weak scenario for the exchange market“.

In this regard, the analyst said that does not necessarily imply a discrete jump in the exchange rate, but it will depend on Javier Milei’s speech these key days and if there are announcements (such as the renewal of the export dollar). “It will be very difficult for the Central Bank to continue buying dollars and we will also have to see the messages that Milei can give regarding dollarization“, he said and on this point he highlighted that it is important, for example if it devalues ​​to $500, see What plan is there behind because if it is not consistent it can become inflationary and not necessarily solve the exchange issue.

On the other hand, a report from ΘUTLIΣR that came out after the ballot indicated that regarding financial exchange rates (MEP and CCL)“depending on the statements of the president-elect in the coming days and the situation in which the government is delivered, we believe that everything is given for additional increases in the exchange rate in the short term”.

In turn, since PPIthey predicted that CCL will likely open well above Friday’s $870given the prevailing uncertainty and, from the flow side, the disappearance of the 30% liquidation of exporters, probably validate crypto dollar levels. “Yes, it is worth saying that The cut from the $1,200 zone after Milei’s speech reflects the low probability of dollarizationwhich continues to leave the real CCL in excessively high terms for a scenario in which the peso remains alive,” they clarified.

As to ROFEX dollar futureswhich serves as a thermometer to know what the market is projecting regarding the wholesale dollar, had closed November position at $370which, from PPI, considered that “it seems to have been very cheap given the probable discrete jump in the exchange rate. The position of December at $670 for 12/31 can also look attractive with a Milei quickly emerging from the exchange stocks”.

Lastly, since FMyA, They projected that regarding the official dollar, “we assume an Exchange unification, not a doubling for December. Our assumption is $800 for December.” As for the blue dollar maintains that it will be “pressured” until it is clarified whether or not there will be a dollarization plan. “If the dollarization project is consolidated, it is difficult for the parallel dollar not to rise”they closed.

Source: Ambito

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