The blue dollar at more than $500: did the pre-election rally start?

This daily leap is the biggest that the Dolar blue since last June 16, when it had risen $7 in a single day, but, in addition, the new value marks a new record nominal and also implies the breaking of an important symbolic barrier, as each time the price of that exchange rate changes hundreds.

As Gustavo Quintana, from PR Operadores de Cambio, explains, this rise in Dolar blue above $500 pesos, “was something to be expected after a brief period where that market exhibited relative stability.” And he sees the sharp rise as nothing less than a reflection of the Greater demand by hedging in a segment that operates with low volume and that receives the impact of trend changes.

Dollar blue puts first: this is how the market reads this rise

But it would not be a worrying price level at the moment, since Andrés Reschini, an analyst at F2 Soluciones Financieras, points out that “despite having broken the $500 barrieraccumulates a lower rise than inflation so far this year and 1.8% so far this month”.

And it is that, according to calculations of Ambitscale 45.4% in these six months and 12 days while the cumulative inflation in the same period is around 54%. So, you see a strong delay of the blue and it seems that this dollar would still have room to rise in relation to the evolution of prices in the economy.

And this becomes even more evident when taking into account that “the gap with the official dollar it is still below 100%”, as mentioned by the economist Jorge Neyro. And it is that, despite the high nominality of the economy, the gap with the exchange rate regulated by the Central Bank (BCRA) remains close to 90%.

Likewise, a key piece of information to observe is that, in the last two months, between April and July, the Dolar blue makes a price difference of just $6, since it happened from $497 to $503 in that span.

And, on the other hand, although the financial dollars are quite behind the blue, with a Cash With Settlement (CCL) in the $495.5 and a MEP At $489, Reschini estimates that the first “should be, according to the growth model of the stock of pesos, at approximately $575.”

This is key information to anticipate where the price of the Dolar bluegiven that Reschini points out that “in historical terms, the latter has always been quite close to the stock exchange rate, so that, if it starts, the informal exchange rate still has room to rise,” the analyst points out.

All of this means that, despite the strong rise in prices on the day that led the Dolar blue, “is not generating great nervousness”, as Neyro points out. However, the market is waiting for what is to come.

Blue dollar: will it continue to rise?

Looking ahead, Neyro expects the price of the Dolar blue It tends to rise, although it indicates that it will do so at a “variable rate”, as is usual in that market. And it is that, according to Buteler, “a quiet dollar and an evolution of inflation that, although it slowed down in recent times, is above the evolution of that exchange rate is not sustainable.”

In this sense, it clarifies that, beyond the fact that it is expected that the inflation June is located around 6% or 7%, likewise, it continues to be a high level of price increases and explains that, with these indices, “we cannot pretend that the dollar does not rise.”

In fact, he considers that it is preferable that the evolution of blue be gradual so that it accumulates arrears and jumps very strongly in a single day, since that generates alarm in all sectors of the economy.

Does the BCRA have tools?

Consequently, Reschini points out that, although Argentina currently has an exchange market that is mostly regulated by the central bank and that allows the generation of arbitrations that result in a bearish or pacifying effect on the blue, “it will be necessary to see if they are sufficient in the face of the demand for dollarization in the face of the PASO, added to the uncertainty generated by the uncertainties about the negotiation with the International Monetary Fund (IMF).

It should be remembered that, as Quintana points out, “electoral times are getting closer and closer and, as is known, these stages stimulate dollarization”, especially in a scenario of uncertainty and with complications in the economy, such as the current one, with exchange restrictions, which affect growth and a shortage of reserves, which hinder the firepower of the BCRA.

In this context, for analysts it would be logical or, at least expectable, that we see a increasing exchange rate pressure forward and let this store go up as the election gets closer.