The acceleration of inflation deteriorates the multilateral real exchange rate ahead of the harvest months. Future dollar markets project an official rise of 26% between now and the end of March.
Future dollar markets They operated upwards in recent days and reflected doubts about the sustainability of the exchange plan announced by Luis Caputo a month ago. After the devaluation that brought the official dollar to $800, the Minister of Economy indicated that the crawling peg It would remain around 2% monthly going forward, a rate well below inflation. In this framework, given the acceleration of the inflation December and that expected for the first quarter, the market calls into question the possibility of this pattern being sustained, given that it would considerably delay the real multilateral exchange rate in view of the months of greatest dollar inflows due to the coarse harvest, in a context of shortage of reserves in the coffers of the Central Bank.
In that framework, the implicit devaluation expectations in the futures contract for January remains close to the Government’s 2% objective. However, for February it is 6.9% and 17.3% for March. In this framework, it is expected increase in the official exchange rate of 26% from today until the end of March, a rate highly higher than that stipulated by the Minister of Economy. Thus, for February the market trades one dollar at $888, for March at $1,026.50 and for April at $1,143.50.
Future dollar: what reading does the market make?
Andrés Reschini, analyst at F2 Soluciones Financieras, highlighted: “Beyond the ups and downs, it is noticeable in the curve that the market assigns greater chances to a correction or an additional jump from March which until Friday was at a 17% annual effective rate on the February price.”
After the exchange rate jump of 118% of the official dollar on December 13, the real multilateral exchange rate jumped to 168 points, the highest since the exit from convertibility in 2002. Currently, according to the latest official data from the BCRA, it fell to 159 points, although they are still high levels mainly if the average of recent years is taken into account. However, in the face of inflationary acceleration which would exceed 20% monthly in the coming months, The devaluation effect could be diluted in the short term in the face of the months of higher dollar inflows.
Along these lines, Reschini pointed out that “given the need for foreign exchange to enter the reserves, the market doubts that it will be achieved with a multilateral real exchange rate this eroded and believes that the most likely thing is that they will set a slightly higher devaluation to take advantage of the thick harvest.”
For his part, the economist Hamilcar Collante considered: “Future dollars corrected upwards to the extent that financial dollars corrected. If the gap opens a lot, the future dollar will also tend to go to a higher level and The 2% of the crawling peg seems inconsistent due to the inflationary dynamics and because it is so low compared to the increases in financial dollars, with a CCL dollar that rose 20% in the first days of January. Going forward, we must monitor what the Government is doing, which probably expected the gap to increase, but not so quickly.”
Source: Ambito
