City guru gave the two reasons that anticipate a longer duration of the exchange rate

Salvador Di Stefanoone of the expert gurus in business and finance most listened to by the City, warns that “Whoever wins the presidential elections, there is no way to normalize the flow of payments abroad“, unless he gets a mega loan in dollars, which he believes “would be something truly miraculous.”

The analyst points out that Argentina’s private debt is US$93.4 billion at this time, of which US$55.4 billion correspond to the commercial debt column yu$s37,954 million, to the financial company. Likewise, within the commercial sector, it details that US$36,939 million is with importers (US$20,704 is with related creditors and US$16,235 million is with other private creditors).

It indicates that, taking into account that the reserves of the Central Bank (BCRA), today are around US$22,000 million and that the country suffers lack of genuine financing in a context in which, added to the fact that October collection grew by 127.4% annually when the estimated inflation would be around 150%, “regardless of its political sign, the next government will not have significant foreign currency income until March or April of 2024” and considers that this implies that Argentina will pass several months with a shortage of dollars.

Public collection: a problem

Thus he anticipates that, if collection continues to fall, the next government will have a serious problem, since expenses are inflexible downwards and there is no external credit.

For Di Stefanoan additional problem is the fiscal health of the provinces and points out that, “although until now they have not shown a fiscal deficit, in the future it may emerge with great force.” And the provinces do not have the same room for maneuver as the National State, they do not have a Central Bank, and it is impossible for them to access external credit in a context in which internal credit is scarce and expensive.

Consequently, it indicates that, like all the beginnings of provincial mandates, there will surely be a moratorium and a tax increasebut for these measures to take effect, time is necessary, “exactly what subnational states lack to face the payments of salaries and bonuses at the end of the year,” he warns.

Di Stefan considers that The drop in tax collection at the national, provincial and municipal levels, “will leave a void that is impossible to fill”. “We are faced with a mix of needs: there is a lack of dollars for imports, a shortage of foreign currency from the Central Bank, and there is a lower flow of funds from the State,” says the guru. And he anticipates that this could result in The dollar clampdown lasts longer than many assume.

BCRA reserves in decline and provinces in trouble

Alert that rebuilding the Central Bank’s reserves will take a long time and that this could begin to occur as dollars come in from the harvest, a trend that is expected to happen from April of next year.

He hopes, however, that provinces linked to natural resources do not have big problems, just like those that made a big adjustment in their accounts and have a fiscal surplus, like Córdoba. “The rest of the districts will have to move, affecting current expenses, resources that were destined for capital spending, which will have consequences on economic activity,” he predicts. And he does not rule out that, in those cases, the issuance of quasi-currencies be a path to explore.

However, for the analyst, the dollar stocks It cannot be eliminated, no matter who wins the next elections, and it does not rule out an increase in the exchange gap and considers that whoever carries out gradualist policies will have to increase emissions in order to finance the State’s deficits. Meanwhile, anyone aiming for shock measures will have to recognize first-hand rates of change much higher than the current ones. And, if you do not have sufficient reserves to open the capital account, the stocks continue.

“In this context, buy financial instruments tied to inflation, evolution of the wholesale dollar, MEP dollar or cash with settlement, seems like a very good choice,” he points out. He also believes that actions linked to exports will copy the rise, but he sets the condition to observe the fact that “the continuity of the stocks will It will take away profits because they export with one dollar and pay their financial debts with another.”