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Bullish blue dollar warms up: how the currency will continue and what the market anticipates

Bullish blue dollar warms up: how the currency will continue and what the market anticipates

He Dolar blue experienced a notable increase last week. It rose $80, marking the biggest rise since January and the third most significant in 2024. This behavior consolidated the bullish trend, making the dollar illegal to its highest value in three monthsexceeding $1,100.

Thus, last week, the parallel exchange rate increased $20, closing the day on Friday at $1,090 for purchase and $1,120 for sale, according to a survey by Ambit. With this increase, the gap with the official dollar widened to 26.3%, the highest level since February 27. This week was influenced by the sixth rate reduction of the Central Bank (BCRA), led by Santiago Bausili. After knowing that inflation returned to single digits (8.8%), The monetary authority decided on Tuesday to lower its monetary policy rate by 10 percentage points, placing it at 40%.

Economists and financial analysts consulted by this medium agreed that this measure had a direct impact on the increase in the blue dollar, because holding pesos and investing them in fixed terms is increasingly less attractive. In most banks, where returns were already negative, the rate was adjusted to 30% annually, which is equivalent to 2.5% monthly, very far from the 5% to 6% inflation projected for May.

Blue dollar: what the market anticipates

Leo Anzalone, director of the Center for Political and Economic Studies (CEPEC), does not estimate that there will be major shocks with the blue dollar this week. However, he explains that although the currency “does not have large levels of backwardness, it is behind and that is not healthy in the medium term” for the economy.

Economist Elena Alonso expresses herself along the same lines, analyzing that although the Dolar blue went up last week, “He did it because by lowering the interest rate so much and given the returns on fixed terms, people feel safer keeping the dollars.“It should be remembered that some fixed terms already have rates of 20%, and people are moving to hoarding in dollars.

Alonso comments that, in addition, more people began to talk about dollarization, which generates shelter, fear and uncertainty, leading people to take refuge in the dollar, which has always made us feel safe.

Blue dollar: how the dynamics continue

On the other hand, regarding the expectation of the blue dollar, Alonso maintains that “I could remain calm because there are not so many pesos in circulation. Even if one investment is exchanged for another, “People have had such an increase in their daily costs that those excess pesos were shrinking due to this situation.”

Regarding the exchange rate delay, I believe that there was very high inflation in dollar terms due to the inflation in pesos that occurred in the first months of the year and in December. This may create the perception of a cheap dollar compared to this situation, but I do not see the possibility of the government making a devaluation increase, especially with inflation on the decline.

In this context, Alonso considers that the rearrangement of costs and sales prices is being left in the hands of companies so that they seek to be more competitive. He also suggests that the State should intervene by reducing taxes to give them relief, but he does not believe that this will happen through an adjustment in the exchange rate.

dollar blue 2024.webp

Regarding the rate and the dollar, we Anzalone observes that it is, at least, a collateral result that is good for the Government. The problem is not the official dollar, he explains, which he believes will continue with a crawling peg of 2% per month, nor is it the blue. “Here what you have to observe are the financiers, because they are the least confident.”

“So, every time the rate goes down, the movements occur there, the one to observe is the CCL. Why is it a beneficial collateral result? Because every time there is a cut, the CCL rises a little, which is the that looks at the countryside, since it liquidates 20% there, if the countryside liquidates, the government gets dollars,” the economist slips.

Thus, lowering rates not only helps the Central Bank to improve its balance sheet, but also to improve the farm equation and, consequently, to provide incentives to liquidate.

Regarding the political ambot, as explained Alejandro Bianchifounder of AsesorDeInversiones.com, also affects the blue dollar the possibility that the Law Bases don’t go out for the famous May Pact and that it could be postponed to June or July, according to the president Javier Mileiwhich generated “some kind of fear in the market”.

Source: Ambito

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