With the political wrist at its fullest, the Government expects a “cushion” of dollars and another series of variables that will allow it to protect itself against the exit of the “exchange stocks” and reduce the risks, especially with inflation.
The exit from the exchange rate It is already further away than expected and the consensus is that in the remainder of 2024, There will be no modification in the exchange rate. But after a series of speeches by Javier Milei at IDEA and by government officials during the Central Bank’s Monetary and Banking Conference, the signals were clear despite the fact that the Government refuses to reveal the dates.
For the markets, si the exit from the stocks does not occur in the first quarter of the year – which is the date on which exchange and monetary policy corrections usually occur – will not happen in 2025.
“There is a growing consensus that if it does not come out in the first quarter, it will leave the exchange rate after the legislative elections.“explained Paula Gándara, CIO of Asset Management at Adcap Grupo Financiero in her podcast “Bulls & Bears”.
The main axis of the market is that the exit from the stocks will imply a exchange correction that could undo what has been achieved so far: that inflation once again has a downward trend. In that sense, for the market there will not be an abrupt exit in the coming months, but rather small advances in the release of restrictions, especially for the import sector, as was already announced last week.
According to Econviews, after those aforementioned speeches, “There was the feeling that there was no rush to get out of the trap. There were surprises. The first is that the exit will be with a floating exchange rate – more similar to a bimonetary economy – and the second is that the indicated moment to exit the stocks will be when the observed inflation converges with the induced inflation – which is 2 .5% monthly that, according to Milei, there will be no excess supply of pesos,” explained Miguel Kieguel’s consultant.
For its part, Grupo IEB stated that there are still measures to be taken to get out of the trap and added that the 4% break in inflation is beginning to consolidate expectations that “the plan works,” and for the moment the exchange gap is located at 20%, lowering the level of uncertainty.
“It is evident that companies have a better climate to be able to develop their commercial activities, by improving payment conditions for imports. All this leads us to think that the economic recovery has a high chance of being sustained over time, helping to reduce concerns social. Obviously There remain a series of challenges to overcome that will allow the process of releasing the stocks to advance,” assured IEB.
Finally, Romano Group stated that “kicking” the exit of 2025 can bring a risk: “Extending key issues such as the exit of the stocks until after the elections can return to the more turbulent 2025 scenario since it means taking a full political/social gamble, being so unpredictable in Argentina. We understand that the greatest prudence on the part of the Government regarding exit from the stocks refers to the search for a later moment in in order to avoid inflationary turbulence”.
Source: Ambito
I am an author and journalist who has worked in the entertainment industry for over a decade. I currently work as a news editor at a major news website, and my focus is on covering the latest trends in entertainment. I also write occasional pieces for other outlets, and have authored two books about the entertainment industry.
