The first moment of the Economy Minister’s plan is underway: the 54% devaluation of the peso and the price correctionfollowed by its main consequence, the jump in inflation. At the same time, there is another front that is open and is linked to the accumulation of reserves.
In that sense, with the exchange rate jumpit was possible to obtain a prolonged purchasing balance in the official dollar market (the MULC). But the crawling peg’s 2% pace raises doubts about a possible exchange rate delayleaving behind the competitiveness gained.
The second part of Caputo plan It begins between March and April, when the strong harvest currency flow thick, after the drought of the previous cycle. In this context, the market maintains his distrust that you arrive with the 2% crawling peg and foresees that the devaluation could occur in those months, the question is when: before or after the harvest?
In recent days, the futures market He was giving small hints. Short-term contracts maintained moderate increases in line with the 2% objective and were recorded increases in April contracts of the order of 1.6%. The uncertainty in financial dollars leads investors to seek protection through Rofex futures contracts, which rose between 2% and 4%, said Delphos Investment. In that line, the Survey of Market Expectations (REM) published by the Central Bank recently, indicates that the devaluation would arrive in March, expecting a official dollar at $870 and in March, at $995, a correction of almost 15%.
Exchange gap and devaluation
According to what is analyzed, the main risk is that the Central Bank’s buying streak may be reduced before the harvest due to the return of imports and the deterioration of the real exchange rate, which leads to lower settlements.
As highlighted Santiago Manoukian, Head of Research Ecolatinathe Government needs to keep the exchange rate gap at bay, at least until that period and that depends on the following factors:
- BOPREAL auctions. “They contribute not only to keeping the exchange rate gap contained, but also to absorbing pesos and giving the signal that the economic team’s program is going in the right direction.”
- The 80-20 scheme: “It favors keeping the exchange gap more contained due to that 20% that is settled to the CCL.”
- Political factors: “How are some measures or reforms that the Government wants to pass through Congress advancing and that risk is present and the market perceives it.”
The analyst warns that, if there is a expectation of devaluation in the short term, especially prior to the liquidation of the harvest, the liquidations of exporters can be stopped. “There is the risk that one can see that there is a self-fulfilling prophecy“, that the market anticipates that in the short term there will be a devaluation and generate doubts and concerns in that sense for the coming months.”
“It’s a strategy, we always say, ambitious, risky and bold the one carried out by the Government,” he stated Manoukian.
March-April: the definition
From Personal Investment Portfolio (PPI) They highlighted that “it is the first time in Milei’s management that the market discounts greater acceleration of crawling peg in April – month of arrival of the thick harvest – than in March. That is, the market sees a strong jump in the crawling peg in both March and April,” they stated.
In the same way, Gustavo Ber In dialogue with Ámbito, “the expectation of a new devaluation before the harvest to encourage liquidation after the deterioration, due to the combo of accelerated inflation and the monthly crawling peg.”
However, he clarifies that “there seems to be a growing expectation that between March and April the pace of 2% could no longer be maintained and A definition should come there.”
For now the cards remain cast and the question is:comes the leap for unification?
Source: Ambito
