The blue dollar rose $60 in the last four days and Its price is $1,070 for purchase and $1,100 for sale.. Since February 21, when it closed at $1,115, it did not exceed this symbolic value. Thus, the exchange rate pax that it had been maintaining in recent times was broken. And since January the informal exchange rate has not marked such a pronounced rise in a week. That is why the market is beginning to analyze the causes of this jump.
For Gustavo Quintana, from PR Exchange Operators, “this has to do with the lower interest rate.” It is worth remembering that, after April’s inflation data, which reached double digits and was 8.8%, the Central Bank (BCRA) The reference rate was lowered again this Tuesday by another 10 percentage points and was at 40% annually (3.3% monthly). As established by the Communication “C” 97972 of the entity, that “is equivalent to a 49.15% annual effective rate (TEA)“.
Is about a rate that remains very negative with respect to inflation and Quintana explains that “this strategy somewhat discourages placements in pesos.” Thus, he evaluates that “it seems to be a somewhat logical reaction of the market, which in this context seeks a new equilibrium price for the dollar.”
The lowering of the rate, “the” key to the blue dollar
In the same sense, economist Joel Lupieri, from Epyca Consultores, points out that “it is very possible that the rise in blue is due to the new drop in rates.” He details that, until now, investors had their pesos generating interest and “they have been discouraged from continuing with that strategy due to the new cuts applied by the BCRA.”
“With the liquidity they achieved by leaving the fixed term, they have evidently turned to an Argentine classic: the dollar,” says Lupieri. And it is that, according to the economist Elena Alonso“many small savers feel more comfortable with the fixed term or with the dollar than with other instruments and having such a noticeable closeness between the crawling peg (2% monthly) and the rate (3.3%) they see in the currency an attractive instrument.
The tension over the devaluation puts pressure on the blue
On the other hand, for the economist Pablo Ferrari, we are facing “a particular tension in the bid for a devaluation.” The Government maintains that the official exchange rate is setting a correct pace of daily microdevaluations, but the market asks it to accelerate it more in line with inflation.
In that framework, financial dollars recorded their third consecutive rise this Thursday, May 16. He CCL dollar is trading near $1,095, so the gap with the official is 23.5%. While, the MEP rises 0.8% and is around $1,060 and the spread with the official one is 19.4%. This is a trend that breaks with the previous exchange rate pax as well and of course these exchange rates are arbitrated with the blue dollar and put upward pressure on it.
Few purchases despite the thick harvest, another key to the blue
On the other hand, the late exchange rate is discouraging the liquidation of the harvest by exporters. He BCRA has been buying fewer dollars than expected for May. Although the liquidation of the coarse harvest has begun, the monetary regulator has been pocketing between US$100 million and US$142 million per day this week, a low level since the usual daily average would be US$250 million in a good year. That is another element that is conditioning the dynamics of the exchange rate.
The Central Bank has accumulated reserves of about US$28.3 billion and has been purchased in the Milei era for almost US$16,000 million. This is positive data, but the truth is that the prospects for the pace of BCRA purchases going forward are not so good. Exporters anticipate fewer liquidations, not only because of the price of the dollar, but also because of yields.
In fact, Argentina’s 2023/24 soybean harvest would be 50.5 million tons500,000 less than previously estimated, due to lower than expected yields in the north of the country, the Buenos Aires Grain Exchange said on Thursday.
What lies ahead for the blue dollar
Going forward, Alonso considers that “there will begin to be greater interest in the dollar“and points out that this responds to the fact that”there are no investment alternativesadded to the fact that the opportunity cost between the peso and the dollar fell and will continue this path for longer.”
However, Quintana, for his part, points out that “the rise is not expected to spiral” and he thinks that, at some point, it will settle at another level. “We have to wait a few days to see how all of this settles in the market,” he warns.
Thus, everything indicates that in the coming days we will see a slightly upward trend for the blue dollardriven by little attractiveness that instruments that yield rates in pesos have for savers todaythe pressures for a devaluation, which have an upward impact on financial dollars and the problems that arise with the liquidation of the harvest and the consequent lower income of dollars to the BCRA.
Source: Ambito
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