The dilemma between dollar and rate (fixed term) revives in the face of inflation data: does the Carry trade catch on?

It is worth mentioning that the dollar bag remains below bluewith a monthly return last month of 31.8%, above rate, but this month it yields only 2.3% at the moment. While cable had risen no less than 40.6% in the eighth month of the year and In September there is a drop of almost 4%.

The same happens with the Dolar blue, which is even more unstable. In fact, in August, that market, driven by the 22% devaluation who applied the BCRA at the official exchange rate, it rose $185 (+33.6) and, in September, marked sharp drops of up to $20 in one week. This Tuesday, meanwhile, is $5 pesos below the August closing price, at $730.

Consequently, Buteler points out that “the performance of instruments in pesos It is temptingalthough there are products that adjust for inflationsuch as letters or bonds, which may be interesting for make ratebut the others Dollars They are calm at this moment, without knowing for how long.” The key, according to his vision, is: if bet on the parallel dollar or not and even when.

The BCRA strategy: exchange calm, interesting rate

And, in this scenario, the economist Fabio Rodriguezdirector of MyR Consultores, understands that “the Ministry of Economy and the BCRA they need to secure this mini exchange calm”, with an officer at $350 and financiers around $700, with gap Let it not jump much until, at least, the general elections.

Rodríguez explains that this motivation, in turn, “needs a clearer and more sustained real rate policy”. In his opinion, this is a direction that “is not being very clear and he believes that it will be seen if the Government is convinced of continuing to deepen this path starting on Wednesday, when the inflation data.

But he warns that the BCRA they do not have all the degrees of freedom to follow raising ratessince it is limited by quasi-fiscal deficit dynamics. “So, I think they welcome a little summer with dollar stay and carrysomething that would also be helping the soybean dollar 4, which contemplates the free availability of 25% of what was settled, which increases the supply in the CCL,” describes Rodríguez.

Consequently, as anticipated Ambit a few days ago, the economist Federico Glustein believes that “the market does not see an increase in the interest rate, at least for now, since that would imply an increase in monetary issuance via BCRA liabilities, which already represent approximately 11% of GDP.”

Let us remember that, today, the Traditional fixed term yields 9.7% monthly, 118% nominal rate and the annual effective interest (TEA) pays 209%, which Glustein evaluates as “an interesting amount if we consider other alternatives.” For this reason, and thinking that the higher emission of money is to pay taxes Liquidity Letters (LELIQs)it is not advisable to think about a rate hike at this moment, beyond the fact that Private forecasts expect an inflation level of around 12%.

Cross carry between dollar and rates

Thus, for Glustein, “today, the market is in a carry trade towards the MEP and blue dollars, added to operations to Cedears and dollarized ONs to cover itself, but it also operates crossed with the rate and the Leliq, which today pay positively.” And the tendency to dollarize portfolios in this country is undeniable. electoral context of uncertainty. However, investors and savers arbitrate the gap in quotes of different dollars and they do not stop taking advantage of the rateswhich are very convenient today.

And, on the one hand, the gaps in dollar quotes drive, in part, the demand for foreign currency and, on the other, the incidence of MEP intervened calm the expectations of a carry sustained over time. However, Ferrari points out that another interesting possibility today is “make the transition in pesos through a traditional fixed term and then go to the dollar”, but warns that, if choosing this option, the inflation expected.

It also does not rule out the idea of take advantage of the performance in pesos and then dollarizebut warns that this decision depends on the benchmark or the objectives that are set and the time in which the entire operation is to be executed.

The great underlying issue is, without a doubt, at this moment, the one that points Martin Kalosdirector of Epyca Consultores, when he assures that “the problem today is that the dollar is uncertain because it is the great variable of change between the different electoral proposals”.

“Therefore, the expectation that each investor about what will happen to him official exchange rate What governs is the decision of whether to do carry trade or not. The evaluation of whether the risk of devaluation is higher or lower. Based on that, each one will make their decisions,” details Kalos.

Therefore, he points out that, beyond the ratethat is, whether or not it beats the inflation at current levels and whether to raise it or not, the big question is How much does each one believe that the dollar will devalue in the future?. “In that context, the options are many, but the main point is that you will only bet on doing carry trade whoever considers that there is not going to be a devaluation in the very short term,” he summarizes.