In this sense, the analyst recommended what to do with the savings: “Personally I do not recommend selling dollars, it is the last thing I would do, in this instance I prefer to take bank financing. Market rates are around 60% per year, it is a rate at future lower than inflation that could be around 90% per year. I would exhaust all instances not to sell any type of merchandise, including dollars, first I would take financing since the rates are negative against inflation”.
“At current prices I sell dollars and I keep merchandise. I believe that merchandise is a scarce commodity, and therefore I prefer to keep stock and not dollar bills. Buying merchandise is the best business in the medium term,” he said.
“We have a severe monetary policy problem, the State intervened in the peso market and lowered interest rates too much, this does not make these instruments attractive, therefore, economic agents remain positioned in dollars. The ghost train invites that citizens stay in foreign currency and omit investments in local currency”, he analyzed.
The economist assured that to reverse this scenario “The rate of increase of the wholesale exchange rate and the interest rate should be higher than the rate of inflation. But this recipe is not in the DNA of this government. There is no way to discipline the market at this juncture. The Bank Central does not have dollars, therefore, it cannot offer dollars to reduce the exchange rate gap that is located at 160% if it is measured with the blue dollar”.
“The Central Bank at this juncture has two tools, on the one hand, the interest rate and on the other the possibility of increasing the wholesale exchange rate. We believe that sooner or later the Central Bank will have to abandon the ghost train and generate incentives so that investors seek to position themselves in the peso market. To give a sign of confidence, the government should show that it can reduce the fiscal deficit and manage to increase the reserves of the Central Bank. If none of this happens, the market will continue betting on the dollar and the forecasts of a dollar to $400 at the end of the year will come true, as will inflation of more than 90% per year,” he concluded.
short-term outlook
“The blue does not worry me, because in the medium term it is arbitrated in relation to the MEP and the CCL. In the short term, it is governed by the panic of retailers that validate any price, but what you have to look at are the financial dollars that mark the dollarizing impulse of the market.“, expressed the economist Sergio Chouza.
A recent Ecolatina report focused on what will be the coming weeks for the Ministry of Economy: “We are in the presence of a scenario of greater fiscal austerity going forward: without a relevant margin to finance itself with Temporary Advances (even failing to meet the goals with the IMF), the financial program will continue to rely heavily on debt auctions. For this reason, normalizing the financial front as soon as possible becomes even more important, and we will surely see increases in interest rates, which have been postponed” .
“Finally, even if the economic program is redirected (the BCRA accumulates reserves again and devaluation expectations are deactivated) the second semester will be of higher inflation, less activity and with more rigid fiscal limits than the first, indicating that the financial/political/social balance will continue to be unstable. With little time to make substantive corrections that yield positive results, but still plenty of time to contain costs, the current financial crisis is forcing the Government to stop prioritizing profit maximization to focus on cost minimization. And avoiding a devaluation of the official dollar will be at the top of the list of priorities in the coming days,” the report added.
Source: Ambito
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