Economists agree that the weight is clearly overvalued and warn that the exchange delay is around 20%. According to its estimates, the equilibrium exchange rate should have a $ 1,500 floor, a key level to meet the external goals agreed with the IMF and relieve tensions in the economy after the elections.
Specialists argue that A deeper depreciation will be necessary to balance external accounts and comply with the IMF reserves goal.
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One of the main challenges facing the president Javier Milei In his attempt to stabilize the economy is that, as economists and operators coincide, The dollar level is behind. This look took place even before the impact of ads on The financial aid of the United States, which accelerated the decline in the currency in the last days.
According to a report of Bloomberginternational and local banks and brokers calculate that the real appreciation of The currency ranges between 20% and 30%. Barclays estimates that the effective real exchange rate should be up to 30% weaker to underpin the economy. Stonex and the Local Firm One618 place the overvaluation closer to 20%.
The exchange strength was always a pillar of the Milei Plan, along with fiscal discipline, to cool inflation and stabilize the economy. The strategy gave results in terms of prices -inflation fell from more than 200% year -on -year to 33.6% -but at the same time enhanced distortions. Analysts warn that The appreciation of the weight is accumulating month by month and generates increasing risks in a country with a long history of devaluations and defaults.
The symptoms are already felt in the real economy: more Argentines travel abroad to buy consumer goods, renowned refrigerators began to import meat because it is cheaper than local production, and the activity remains resentful of the impact of the tax adjustment.
In recent weeks, the Central Bank had allowed a greater sliding of the peso, pressed by political and financial uncertainty. However, specialists argue that A deeper depreciation will be necessary to balance external accounts and comply with the target of the $ 20,000 million agreement signed with the IMF at the beginning of the year.
Juan Manuel Pazos, chief economist of One618, was overwhelming: “The IMF asks for an annual current account surplus of around US $ 10,000 million, which would only be reached with an exchange rate between 1,650 and 1,700 pesos per dollar,” compared to $ 1,335 on Wednesday.
In parallel, Ramiro Blázquez, from Stonex, also agreed that the currency is still overvalued: “An exchange rate between 1,500 and 1,600 pesos per dollar is more logical for Argentina,” he said.
Anyway, few believe that Milei enables a exchange rate leap before the October legislative elections, especially after the defeat suffered in the elections of the province of Buenos Aires that unleashed strong punishment for Argentine assets, then reversed largely by the US financial assistance announcement. “After the elections, the government will have to move in that direction, if it is encouraged,” Pazos warned.
The panorama is complex because the ruling party this week received a strong USA of the United States. Treasury Secretary Scott Besent said the Donald Trump administration is willing to offer “All stabilization options.” This expectation of external aid, however, reinforces for now the demand for weights, delaying the exchange since the economy that the economy requires.
Source: Ambito
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