Blue dollar in October: how much could it reach in the month of the elections

With all this, the analysts consulted by Ambit warn that the pressures on the different exchange rates in the coming weeks will be “strong” as a consequence of a greater portfolio dollarization in the run-up to the general elections, so It will be a sensitive October when the final days of the race are fully entered, something that historically generates pressure on dollars.

And, as Gustavo Quintana, operator of PR Corredores de Cambio, explains, the imminence of the elections “intensifies the tendency to dollarize and that impacts the demand and prices of alternative dollars.” For analysts, in unison, the current value of the blue dollar “is a floor and not a ceiling.”

Dollarization of portfolios and savings by elections

Thus, the common denominator among analysts is that The blue dollar (and the other parallel exchange rates) continue with its upward trend, at least, until it is defined who will be the new president. Something that also raises doubts, because as Nicolás Olive, from the Rudolph Research team, explains, about Javier Milei, who would have the best chance, “there are three or four questions that cannot be answered: what is it really going to do? Will it be possible for it to implement it? and when will it do it? “That creates uncertainty.”

For this reason, explains Olive, the market tends to abandon the interest rate (increasingly less attractive) and chooses to dollarize to protect itself. This triggers “an increase in the exchange rate,” and once investors begin to enter, this movement intensifies. “Currently, it appears we are in the beginning stages of this process,” Olive adds.

Quintana, meanwhile, concludes that it is possible that current levels are “floor and not ceiling“, since the uncertainty and prospects for the economy “are not very auspicious and issuance remains strong”, therefore, the upward trend continues, “but with an unpredictable end.”

Blue dollar: October and the international scene

In October, two key phases are identified: before and after the elections. Despite certain concerns about dollar maturities for this month, economist Natalia Motyl maintains that The reserves of the Central Bank (BCRA) (which are the true physical support of the peso) could be strengthened by the entry of dollars from the soy dollar and Vaca Muertaproviding the organization with some room for maneuver to stabilize the exchange market.

For Motyl, the Central will opt for this strategy, since it constitutes the main instrument available before the elections, to avoid an abrupt jump in the exchange rate that could affect the perception of voters. That is What you are looking for is to increase your firepower against possible bullfights..

Internationally, factors such as the interest rate by the US Federal Reserve and geopolitical tensions, especially between China and Taiwan, put upward pressure on the dollar. At the local level, the BCRA’s choice to keep “the interest rate and the recent liquidity injection measures” unchanged also contribute to a scenario of “uncertain expectations that could aggravate structural problems in the future,” concludes Motyl. .

Blue dollar: how much will it reach before October 22

As mentioned above, there are different factors that can influence the blue dollar to continue rising, but none downward. Thus, and according to the calculations made by the analysts consulted, It would not be unreasonable to think that the blue price exceeds $900.

For Olive, the exchange rate is likely to reach $900 or even $950. “This depends on the will and ability of the Government to support the MEP through the sale of bonds”, he points out.

Motyl, for its part, estimates that, despite everything, it expects a value for the Blue dollar and CCL of $880, and the MEP at $770 before the elections, this, “assuming that current conditions are maintained.” However, he warns: “new expansionary fiscal policies could generate greater demand for dollars.”

After the elections, The evolution of the blue will depend on the result at the polls. Likewise, due to the exhaustion of current economic policy, it is possible that financial dollars will experience a strong increase, pressured by greater demand, with reduced supply and lower demand for pesos. Then, it is likely that the illegal and CCL will reach “$1,000 and the MEP will reach $900 by the end of October”.

Joel Lupieri, an analyst at the consulting firm Epyca, maintains, in line with Motyl, that the dollar is approaching a floor of around $800 to $820 before the elections. “Its evolution will depend largely on the electoral result,” and could reach $900 pesos in the days before the elections, “which does not seem unlikely at this time.”

Finally, and as the economist Federico Glustein rightly indicates, The key lies in electoral expectations and the amount of pesos in circulation, “influenced by the lower renewal in fixed terms and other instruments in pesos, such as shares”.

Furthermore, he warns that The purchasing power that was increased “artificially” after the Economy measures, due to inflation, will have lost its impact at the end of October, so “after the elections, the direction of the dollar is uncertain and can go either way.” .