Record blue dollar: the five keys to its shot and what can happen in the coming days

This Tuesday, the Dolar blue He hit a strong jump in his quote. It went up $8 and went from $386 to $394. It’s a record price new to the illegal. In fact, he outperformed the MEP again, which dropped to $386, a fact that has not occurred since last March 8. However, it is striking the advantage that the Cash With Settlement (CCL) -up to $399-, which is over $5. The market looks closely at that dynamic and begins to analyze the causes that pushed it up and what can happen going forward.

for the economist Christian Butler, what happened is that “is making up ground because the blue had lagged far behind the other dollars”. He explains that it is normal behavior in this exchange rate to stay put for a set period of time, and then recover with a big jump. “We are all surprised that it rises so much, but the truth is that it is cutting the difference a bit with the other parallel dollars and also with the rise in prices in the economy,” he describes. However, there are several variables that analysts identify as elements that are putting upward pressure on the illegal on Tuesday.

Hence, some analysts are struck by the current price difference between the CCL and the blue, which economist Andrés Reschini, from F2 Soluciones Financieras, mentions as a rare element at this time. “The differential in favor of the CCL calls my attention because, on average, it is +0.2% in favor of the blue vs. the CCL,” he points out.

Key 1: the rumors of splitting

A first element that must be taken into account is the rumors that they started filming in the City between Friday and Monday that the Government would be thinking of implementing a split. Although they were later denied, “these reports have an impact and increase people’s demand for dollars as a result,” EcoGo economist Lucio Garay Méndez told Ámbito in this regard. However, for the economist Federico Glustein, this would usually be seen more reflected in the rise in financial dollars (CCL and MEP) that in the blue

Key 2: redemptions of funds

Another variable mentioned by the economist Joel Lupieri, from Epyca Consultores, is that the rise of the parallel dollar of the day is related to the large number of Mutual Funds (FCI) redemptions which was registered on Monday of this week.

And it is that he presumes that, “perhaps, investors understand that they have already achieved a sufficient return in pesos (carry) and now they are looking to switch to dollars.” The truth is that he considers that it is very probable that, at least in some proportion, these funds could be turning to the demand for blue dollars and points out that, “this money, which until now was immobilized in instruments in pesos, probably is pushing up the price of the blue and is making it jump to these levels.”

Key 3: Return of Earnings

The economist Federico Glustein also maintains that, in recent days, there has been a flow of funds to the money market, which are seeking to remain liquid, but a part is also dollarizing and that may be putting pressure on them. However, he maintains that the upward trend cannot be attributed only to this dynamic, but rather it would respond to various causes. And another of the elements that he mentions is “the income tax refundwhich takes place at this time of the year since they are fresh pesos that are generally transferred to free quotes”.

Let us remember that, since January, the Federal Administration of Public Revenues (AFIP) empowered taxpayers so that they can claim the return of the perception of the 35% for the purchase of dollars or consumption in foreign currency carried out in 2022. And, part of those pesos that were repaid during the first months of the year goes to alternative dollars, putting pressure on their price.

Key 4: loss of Central Bank reserves

Added to that, Glustein mentions that the Central Bank (BCRA) sells currency daily in recent weeks. On Monday, he got rid of more than $260 million, a record that had not been seen for a long time, and this Tuesday, he disbursed another $99 million in the official exchange market. And they consider that this tendency to lose dollars generates concern and coverage search by savers.

From Bullmarket they coincide with mentioning the fact that the BCRA does not stop selling dollars. They mention that some US$1,000 million has already been disbursed so far this month and, “to that, the drought is added”, which complicates the prospect of foreign exchange income from the countryside. The estimated currency settlement forecast for this year has already been reduced by 39% and the situation may worsen, according to analysts.

Thus, as summarized by Garay Méndez, “every week that passes, crop projections are adjusted down and that complicates the economic year in every way, since, on the dollar side, the offer will be at historic lows and, on the pesos side, the collection is also hit hard.

Key 5: inflationary outlook

And, as if this were not enough, Bullmarket analysts indicate that what is putting pressure on exchange rates is “the March inflation expectationwhich they say is above 7%”, since this encourages the ghosts of an acceleration in the rate of devaluation of the peso.

Likewise, the market is concerned about the consequence of the rate hike implemented by the BCRA a few days ago because, as warned in Bullmarket, “this measure implies a need for future issuance to pay interest on LELIQs to banks and a The big question is how all those pesos are going to be withdrawn from the market”, since they generate a higher inflationary expectation.

What’s Coming for the Blue Dollar

Taking into account all these variables, economists see as an expected trend the come up from the blue, although the abrupt jump calls attention. And, looking ahead, Buteler anticipates that “We will see a blue dollar that will have an underlying bullish trend, although it may have some readjustments to the downside.” Thus, he considers that this year, unlike what happened in the previous two, the dollar will beat inflation.