Dollar: what does the market think about the return of the crawling peg

As told Ambit he economist Pablo Ferrari“the movement of official exchange rate went through four stages this year: a gradual non-linear increase through crawling peg the August jump, the freeze for 3 months and today resume the rhythm of small daily appreciations of the dollar with monthly limits”.

Gustavo Quintana, from PR Change Operators, remembers that this measure “was already programmed” and notes that, “from now on, we return to the previous crawling system updating the values ​​to bring them initially with a 3% increase in the month”.

Resume the crawlin peg: one step within what was agreed

And it is that Sergio Chouza, director of Consultora Sarandí and economistMaintains that “was fulfilled as planned in the press release of the Monetary Fund (IMF) and with what Sergio Massa, the Minister of Economy, had anticipated what he was going to do after the fixation of the wholesale dollar.

Thus, evaluate This step of raising the official dollar by $3 is “correct in order not to rock the boat and comply with what was agreed with the International Monetary Fund (IMF). because it was foreseen in the fifth and sixth reviews of the program.” The 22% depreciation in August, the subsequent three-month freeze and the subsequent defrosting for a reduced period of time was what had been agreed with the Fund.

The crawling-peg is back: how the market sees it

Ferrari explains that this movement helps decompress the economy a little these days before the runoff awaiting definitions regarding the economic direction that can be expected from December 10, when the new management takes office. “It is an incipient beginning of a rearrangement of relative prices“he details.

He Economist Pedro Gaite, for his part, points out that this is a necessary step. “We had to unfreeze the dollar and make it follow inflation closely,” he says. And he points out that, looking to the future, we have to see what happens with the exchange rate regime. Thus, he anticipates that the key will be what happens on Sunday with the elections, but whoever wins, it will be necessary to achieve a gain in competitiveness for the dollar.

And, as pointed out by economist and director of Epyca Consultores, Martín Kalos“we must not allow the exchange rate to become too cheap since this generates a perversion of financial, commercial and economic incentives in general.”

Official dollar: the look at the day after the runoff

On the other hand, some voices see that the measure could be interpreted as a signal to the market of the path that Sergio Massa decided to take and that gives an idea of ​​what your exchange rate policy will be like after the elections.

Gaite warns, in this sense, that A crawling-peg acceleration path or a controlled jump in the dollar, as could happen with Sergio Massa, will not have the same effect as a government that lifts all exchange controls from one day to the next., which could put monetary stability at risk. That, for him, is what is really up for debate.

In the same line, Andrés Reschini, from F2 Financial Solutionsadds that “after Sunday we will have to see what happens in light of the result and the statements made by the market and the economic team.”

“We are in a waiting period. It is a window of just a few weeks until there is a comprehensive redefinition of economic policy,” as Chouza points out and aims to generate a certain predictability. He in fact mentions that dollar futures contracts are reflecting the reversal of an initial overreaction and they confirm that the December contract was being paid above $900, but that was decreasing in response to some political and macro signals that reflected that that price was very high.