Dollar: what to expect for the exchange rate in the final stretch of the year

Theblue dollar uba of the last few days occurred after, at the beginning of the month, the Central Bank (BCRA) decided to further lower the monetary policy rate to 32%, from the previous 35% and due to greater seasonal demand due to holidays and availability of money after the payment of year-end bonuses and bonuses, according to what some try to explain. analysts.

Before the shooting of the blue and the financiersthe Argentine monetary regulator decided to accelerate its intervention in the exchange market this Wednesday and managed to sharply lower the MEP. That is one of the reasons why the blue gave up some points on the cave boards. Consequently, the gap with the wholesale dollar is 16.7%.

Market operators focus their attention on the daily trading volumes of debt securities in dollars, with the aim of detecting possible interventions by the BCRA. These interventions, if they exist, seek to contain the increase in parallel dollars and stop the widening of the exchange gap.

Recently, the exchange rate showed a slight rise, although experts assure that this increase does not represent a concern in the current context. The demand for dollars remains high, driven by both seasonal factors and the lower profitability of interest rates in pesos, as mentioned above.

According to the operators, the BCRA would have reduced its exchange intervention on Monday, compared to the previous days, when the rise of parallel dollars forced the monetary authority to activate a peso sterilization mechanism that had been suspended since October.

Dollar: how 2024 closes

Thus, the exchange market is back on track in the last wheels of the year with the momentum of the upward trend observed in the last two weeks, which forced the Central Bank to carry out significant interventions to moderate the increase in the exchange gap.

At the beginning of December, the difference between the official dollar and the parallels was below 5%, the lowest level since 2019, when dollar prices converged with the official exchange rate. However, starting from the third week of the month, the gap widened again to a range between 10% and 15%although it is still low compared to the last four years.

The price of the free dollar and financial rates rose rapidly, exceeding $1,200 in the case of the informal dollar. Faced with this situation, the Central Bank deployed a strong intervention that, as the days went by, was moderated. A first interpretation by the operators was that the Central was seeking to put a ceiling on the increase, after having set a “floor” in the price of the dollar. with the reduction of interest rates decided in the second week of December.

Despite these attempts to control the rise, the informal dollar closed again on Tuesday at $1,200, while the MEP dollar and the Cash with Settlement dollar stood at $1,170 and $1,184, respectively. With these reference prices, it is expected that the last rounds of the year will involve a portfolio adjustment, which could once again impact the value of the dollar.

What worries analysts most is the expansion of the exchange gap, which has tripled in size from the minimum of 4.9% recorded during the administration. Javier Mileireaching 13.1% at the end of last week. Likewise, the difference between the exporting dollar and the official dollar went from 1.1% to 2.6%, which has revived interest in the blend dollara scheme used by exporters to settle 20% of their sales in the CCL, which had almost disappeared.

In any case, movements in the currency market are expected to be largely seasonal. Analysts anticipate that the change in trend could occur in the first days of January, especially after the 9th of that month, when a maturity of debt bonds in dollars will be paid for an amount of approximately US$3.5 billion. This payment will inject liquidity into the market and could increase the supply of foreign currency, which would put downward pressure on prices.