After confirming the latest CPI data that raised inflation in April to 8.4%the Minister of Economy, Sergio Massa ordered a battery of measures to control it. So, the BCRA raised the interest rate 6 points that raised the fixed terms to 97% and the intervention by the monetary entity in the exchange market was increased together with Peg Crawling Pace Management. Despite this, the blue dollar jumped $9 this Monday, May 15, and closed at $483.
Natalia Motyl, economist and CEO of NM consultingin dialogue with Ambitrevealed what they believe are the causes behind this new rise: “It responds both to the inflation data for Friday as well as the measures taken by the Government in response. Fundamentally today the market has discounted the 600 bps rise in interest rates it has been insufficient to avoid the dollarization of portfolios. The effective monthly rate has remained below inflation and the instruments in pesos have ceased to be attractive for savers”.
This happens, he added, “in a context in which a post-election exchange market correction is expected.” On the other hand, he mentioned Difficulties in accumulating reserves by the BCRA because “it does nothing more than put pressure on the demand for dollars for coverage. Since, it should be noted, that the dollars in the BCRA are the only observable physical support that the peso counts today. Today net reserves are in the red at $3.3 billion and continue to fallThis exacerbates the crisis of confidence that has a negative impact on the demand for the peso”.
The blue dollar scored its biggest rise in three weeks this day and once again exceeded $480, for which the illegal bill surpassed Qatar and became the most expensive exchange rate on the market. Notably So far in May, in turn, the US currency registers an advance of $14, after ending April at $469.
The Economist Federico Glustein, also in dialogue with this mediumagreed with Motyl when mentioning that The rise has its consequence in the inflationary data that marked 8.4% and “showed that despite the rise in the interest rate, it still continues to be, in real terms, negative profitability.”
“After, the increasingly restrictive measures for financiersadded to the exit of dollars from the system together with the fact that the government announced that it will import food without tariffsconsolidate a growing demand in the blue market which, being the only free market and which guarantees foreign currency upon request, is the one that guarantees access to currency,” he added.
Glustein also opined that The rise in the blue dollar is a consequence of the dollarization of pre-electoral portfolios and resources. “It is frequent on this date and in the context, which motivates and fosters a constant demand until August at least, in the blue, which periodically drags a strong rise in a few days, like today, which did so at $9”, he closed.
Finally, Gustavo Berexplained that “although they started off relatively calm, with the running of the wheel, The deregulated and free financial dollars began rearranging in response to the latest measures announced, as operators anticipate that they would be ineffective in improving expectations. (or at least activate greed) in the current political-economic context. The hard inflation data and measures that are perceived as ineffective in this delicate scenario”.
Source: Ambito
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