Blue dollar: after stopping the run, the market risks the floor of the parallel

Once again, the blue dollar draws the famous saw movement, since it is usual that, after such a strong jump in a few hours, it is located again at a lower level than the peak, but above the starting point. This time, after the intervention measures in the dollar stock market carried out by the Central Bank (BCRA)this Wednesday, the blue began to drop and closed the day at $474.

Thus, a cloak of calm seems to have fallen over the exchange rate tension that had led it to touch $500 on Tuesday, and, while some 24 hours ago everyone wondered if the price of the illegal had a ceiling, now, the big question is what is the floor of this rearrangement.

For Salvador Distéfano, one of the gurus of the City, the floor would be between 440 and 445 pesos. Whereas, the financial analyst Salvador Vitelli, considers that “it is not unreasonable to think in the approximately $460 as a possible floor” and believes that it is probable that the blue will rest a bit between the current value and that as long as the Government continues with the intervention of the financiers.

Explain in this regard that the fact that Get out there and dial the financial dollars, which are now at $469 the Cash With Settlement (CCL) and $446 the MEP, gives a certain ceiling to the path of the blue. However, he warns that “the intervention is a delicate issue because there are not enough net reserves in the Central Bank (BCRA) and the advance of Special Drawing Rights (SDRs) of the International Monetary Fund (IMF) It serves, a priori, to avoid mismatches between disbursements and payments, but they are not freely available currencies”.

The agreement with the Fund and the intervention of the dollars

That is why the Minister of Economy, Sergio Massahad to ask the Fund for permission when it was decided to move in that direction and it agreed because the situation was dramatic, but there is a clause in the agreement with the body that prohibited such intervention.

For his part, Juan Pablo Albornoz, an economist at Invecq, points out that “it is very difficult to establish a floor for the pricebut indicates that “we are close to overshooting values, as happened at other times, such as in October 2021, which was resolved with a more pro-market policy turn and the expectation according to the Fund, and that of January of the year past, which was stopped with the pre-agreement with the Fund”.

This time, he considers that a rise in rates would not make much sense and that intervention with dollars is not very effective either. “It would only be resolved with a political turn, as was the assumption of Massa last year. It could be seeing the minister sitting with the opposition and great political prudence”, says Albornoz.

Politics, a key element

“It is 100% dependent on what the policy does and we are in a very sensitive moment. If this same market came to pay a 150% gap, we are far from a crisis peak. On the other hand, gaps below 80% have shown, based on previous history, that the market sees it as cheap,” he points out.

so, eRegarding the possible ceiling, consider that it could be much higher than the maximum value that it touched in the last days, taking into account the evolution of other runs, which would be equivalent to $570, taking into account the run of June 2022 and taking it to today’s values.

Still, analysts warn that it will be difficult for the government to keep the blue dollar stable going forward, especially if there is some extra trigger to encourage a run. And by extra triggers, Vitelli means an acceleration in inflation or bad news from the Fund. “If the inflation in April is as bad as expected or the IMF does not disburse the advances that Massa has been asking for in the short or medium term, it will be difficult for the blue dollar not to skyrocket,” he anticipates.

And it is that it is an election year, in which the market already took it for granted for months that the parallel exchange rates could be accelerated as the elections approached, but on this occasion, the situation became even more complex as a result of the shortage of reserves and the drought, which complicates the projection of the income of dollars from the countryside to the Central Bank.