The multilateral real exchange rate (TCRM)an index that compares the peso with the currencies of the country’s main trading partners, had touched 176.6 points, highest since September 2002after the increase in the official exchange rate of 118% after the assumption of Javier Milei, however, if it is adjusted for the expected inflation for December (and not the previous measurement of the BCRA’s REM) it is located below the dollar of $60 post STEP 2019.
Multilateral real exchange rate
As published this day Aurum“when the December real exchange rate series is corrected by adjusting it for the current expected inflation (27.7%) instead of using the median of the old REM as the BCRA does (17.1%), The current real exchange rate is already below the $60 dollar post PASO 2019“.
“And if we project the 2% monthly crawl and expected inflation in January, By the end of that month the real exchange rate would be very close to the dollar $350 post STEP 2023. This rate of daily devaluation can hardly be sustained without fueling expectations of a new discrete jump,” they asserted.
In fact, from another consulting firm, they warned: “As the days go by, the incentive for exporters to liquidate will decrease (because the differential between the peso rate and 2% monthly crawling will be increasingly less sustainablewhich will result in expectations of acceleration of the crawl or discrete jump of the spot) and import demand will increase.”
It should be noted that after the official jump to $800 after Javier Milei took office, the type of multilateral real exchange rate reached 176.6 points, highest since September 2002. That is, in real terms, the official dollar was at the highest peak since the exit from convertibility 21 years ago.
Gap at minimum since 2019
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In addition to the appreciation of the TCRM as a result of inflation, at this time it is also evident another process that has the official dollar as its protagonist. As published Salvador VitelliHead of research at Romano Groupthe exchange gap is currently around 10%, a level not seen since September 2019. So this day, the dollar Cash with Settlement fell $40.47 (-4.3%) to $901.25a trend could already be glimpsed last week.
“The A3500 maintained the devaluation rate of 2% monthly and closed at $804.8. Meanwhile, With the greater supply from exporters, added to the high seasonal demand for pesos in December and the restrictions that continue to operate in the exchange market, they allowed financial dollars and the gap with the official dollar to continue to decline., despite the drop in interest rates that remained well below inflation. The MEP with AL30 lost 5.8% in the week and closed at $947, while the CCL lost 4.9% to $938,” he explained. Martin Cohenchief strategist of Cohen.
However, this situation of fall in financial exchange rates could be momentary. According to a report by Ecolatina“the striking negative level of the interest rate in real terms in the face of lower rates and the strong inflationary acceleration could induce a new fall in the demand for money, where financial dollars could regain some attractiveness for the market.
Precisely, “if the inflationary acceleration is greater than expected, we do not rule out that in the coming months the market perceives a real delay in the CCL-MEP and start considering them as an investment opportunitywhich would coincide with the seasonal reversal in the demand for money since February and the increased demand in the MULC“.
Source: Ambito
