The 6% inflation shows that we are in a process of high inflation, which would be repeated in the following months, since the dynamics of scarcity of investments, low productivity and rising costs dominate the scene.
Can you explain it to me better?
A year ago the wholesale dollar was rising at a rate of 1% per month, while today we are updating the dollar at a premium of 4% per month. Without increased productivity, everything will happen to price.
Energy?
The same thing, last year we had frozen energy prices, this year we are going to a thaw process that implies greater increases, this has a direct impact on costs. In the case of fuel, we have a mix of rising prices plus shortages, which causes a cut in the supply chain and drives up prices.
Food?
As an example, we bring to the scene a single button, meat does not stop increasing, the shortage of supply due to a change in the way cattle are fed will drive prices up in the coming months. We went from fattening in a corral that ends in 120 days, to fattening in a pasture that ends after 15 months, this means that the arrival flow of finished heads to the market is postponed in time, the offer drops to a faster pace than demand and this produces a logical increase in prices.
Energy, exchange rate and food explain the rise
To that you have to add the lack of investment, fewer products offered and a greater supply of tickets in the market make prices fly. Let us remember that, in the last 4 quarters, $2,114,712 million were issued and that the supply of goods grew very little in the economy. The result is inflation of 58% per year and prices will continue to rise.
What happens to the interest rate?
The increase in the interest rate enhances the problems, the monetary policy rate rose to 49% per year, this implies that a year ahead the liabilities of the Central Bank will increase by this level or much more.
Why more than 49%?
Because the Central Bank capitalizes the interests, this implies that a snowball of great magnitude is being assembled that would imply an enormous liability for the Central Bank. If the reserves do not increase by the same magnitude, the value of the alternative dollars will have to be sought at levels above $300 by the end of the year.
This implies that it will be necessary to recalculate the goals with the IMF
As the Galician GPS says, recalculating. The indebtedness of the Central Bank is around $5,300,000 million, with the increase in the monetary policy rate added to the absorption of more pesos that are going to be issued, we would have to think a year from now that these liabilities are going to be located above $ 10,000,000 million. If we add to this the monetary base, which could be around $4,500,000 in a moderately optimistic scenario, we will have monetary liabilities of around $14,500,000 million. In order for the dollar to have a value of $300 a year ahead, the reserves should be around US$48,333 million, and today they are at US$41,341 million, and have not increased.
Do you say that alternative dollars will be over $300 by the end of the year?
With this political crisis plus the high demand for dollars to import, and few exports in sight, everything suggests a scenario of a rising dollar, and the myth of the blue dollar that does not exceed the level of $ 220 is broken.
Do you see it right away?
It is not necessary to repeat it, but we are going to say it the same. The schedule of tax maturities does not allow us to increase in the next 60 days, but, after July 15, there is a very important increase in prices.
The president says that the best comes in the second semester
It is very successful, which did not say what is best for those who bought dollars.
Source: Ambito
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