Blue dollar, on the decline: the keys to the illegal exchange rate in April, what’s next?

Blue dollar, on the decline: the keys to the illegal exchange rate in April, what’s next?

He Dolar blue maintained a downward trend at the end of March, since fell $5 between Monday and Wednesday of last week. The need for pesos, which is making many Argentines sell their dollars To be able to cover their daily expenses in the face of the liquefaction of income due to growing inflation and stagnant salaries, is key in this process.

In that scenario, the economist Pablo Ferrari poses to Ambit that “how the sale of dollars by small saverswho are parting with their savings to earn pesos that will allow them meet your expenses daily,” will be a variable that will affect the future of blue this month as well as in March.

In the words of economist Federico Glustein: “The evolution of blue dollar quotewill depend, in part, on whether the drain on savings continues, agents who sell what they have saved in their mattress out of necessity, driving down the price.”

BCRA reserves, a key for the blue dollar in April

And that is combined, on the other hand, with the process of accumulation of reserves of the Central Bank (BCRA), which is based on the postponement of payment of imports. If the monetary regulator can continue buying dollars going forward, it is likely that it will also contribute to the continuity of the pax exchange in the parallel.

Thus, the Eco Go economist Lucio Garay Méndez assures that “the key to parallel dollar is going to be the thick crop”. He points out that the supply of dollars “is seasonally higher in this part of the year and that means that there should be no exchange conflicts” in the short term, given that foreign currency will enter from the countryside in the strongest moment of grain liquidation of the year.

The analyst indicates that, “today, The Government allocates 20% of exports to contain the exchange gap“, given that it allows part of what is settled to be entered through the Cash With Settlement dollar (CCL) and considers that “this volume in April will be much higher.”

Consequently, he points out that this could generate, on the one hand, “that the parallel dollar will fall and, on the other, it will make the Central Bank (BCRA) resign many Dollars if it continues with the 80/20 system for exports.” And the currencies that go to the CCL are not channeled to the official exchange market (MULC).

Financial dollars, another key element for the blue

But, beyond that, a bearish dynamics in the price of financial exchange rateswhich are arbitrated with the Dolar bluecould determine a fall or exchange rate pax in that square as well.

It happens that, according to Glustein, the price the other parallel dollars are key to the dynamics of the blue and he hopes that, “if the MEP shoots up, that could enable a carry between that place and the informal market, which would make it rise again.”

Along the same lines, for the director of CyT Economic Advisors, Camilo Tiscornia“the evolution of the harvest settlement and what is channeled on the Cash With Settlement side” will be key in the evolution of the blue dollar this month.

Although, at the moment, it seems that The release of some restrictions that would allow more support for the CCL is not made, which is very low, anticipates that, “if that materializes, that financial exchange rate, which arbitrates the illegal dollar, could rise a little, and that could drag the blue up, even slightly”.

Key to the blue: the evolution of the official dollar

On the other hand, Garay Méndez mentions official exchange rate as another key variable. “Today, The Government continues to move the dollar at a monthly rate of 2%which is why it encourages the countryside to settle its harvest as soon as possible, on the one hand, since with each passing day, the real exchange rate is delayed and that means that the real pesos they receive for each US bill are becoming less and less. exported,” he says.

Consequently, as pointed out by Ferraria fundamental vector for the evolution of blue in April will be devaluation expectation. “If there begins to be a shift in the official exchange rate and the crawling peg that the Government applies or not and the pressure that is generated around that variable, it will be a determining element,” he sanctions.

Explain what the market pressures with a greater devaluation expectation and, on the other hand, the International Monetary Fund (IMF) It also calls for a more rapid evolution of the official dollar. In that context, he mentions that, “if progress is made in that sense, the blue should be kept slightly above the official one.”


The BCRA applies a peg crawling rate of 2% monthly to the official dollar.


Along the same lines, Glustein comments that “If the restrictions on imports are released or made more flexible, the parallel dollar could suffer changes and that something similar would happen if there is an advance in the official exchange rate greater than 2% per month of the current crawling peg.”

Garay Méndez anticipates that, “today the expectation is that the crawling of 2% and the dollar 80/20 remain unchanged for the moment.” However, he recognizes that any external or internal shock that changes favorable short-term expectations may cause the Government to review its exchange rate policy.

Politics, an unavoidable element for the blue dollar

And, as Tiscornia maintains, “the political issues “They are another element that must be taken into account for the dynamics of the blue dollar.” He anticipates, in that sense, that, if there is some very negative event that generates turbulence, it could have an impact on the illegal exchange rate, which is a very small market that usually reacts almost emotionally to news in political and economic mood.

In principle, The expectation is that $1,000 will remain as a support price for the blue dollar this month, which will range between that value and $1,100. All in all, the elements to follow closely this month to measure how the evolution of the blue dollar can continue are the process of dissaving that is seen today in a large part of society, the evolution of BCRA reserves, which is very much in line with the progress of the official exchange rate and the CCL market, and the political climate. According to City analysts, these are the keys of blue in April.

Source: Ambito

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