Blue dollar on the rise: the factors that can put a stop to the climb

Blue dollar on the rise: the factors that can put a stop to the climb

He Dolar blue comes with a bullish streak and quotes $1,210 for the purchase and $1,240 for sale in the City Caves. It advanced no less than $120 so far this week and It is located at nominal maximums since mid-January while the gap with the official is now 38.2%, the highest since February. It seems unstoppable and the market is wondering what elements can put a stop to this escalation.

The first thing to note is that this upward trend responds mainly to three elements:

  • The first and most relevant is that the Central Bank (BCRA) resolved lower the monetary policy rate very strongly in these five months and it is already at 40%, which makes saving in pesos less attractive and puts upward pressure on the parallel.
  • another element is that The BCRA is buying dollars on a sustained basis, but not at the levels expected for this time of yearwhen the harvest liquidation is usually at its best (it has been buying around US$150 million a day, when the average in other years is US$250 million).
  • and, finally, the devaluation pressures (since the market has been indicating that the official dollar is lagging behind the crawling peg rate of 2% monthly), which is felt, mainly, in the financial markets, which also marked increases in the last days.

In summary, for Gustavo Quintana, from PR Change Operators, “we are in a process of rearranging prices as a result of the rate reductions ordered by the BCRA.” He explains that investments in pesos have lost attractiveness and that, consequently, there is a shift of investors who return to take a position in dollars.

Bullish blue dollar: an expected trend but one that worries in the long term

In addition, the economist Christian Buteler indicates that “all exchange rates are rising” and considers that “this is logical considering that inflation from November to today was 120% and the dollar rose around 30%/35%.”

Buteler agrees with Quintana that the drop in rates was what ultimately justified this rapid rise and, although he does not consider it a movement to be alarmed, he points out that “we have to see how it evolves because you cannot have daily jumps of the order of 5%”.

“Many small savers see the fixed deadlines falling, without giving the returns that they gave until weeks ago. With this on the table, and taking into account that the dollar was still for months, they have begun to increase demand for the American bill,” warns Epyca Consultores economist Joel Lupieri. And he warns that, on the other hand, to the extent that the price of the ticket rises, it encourages others to buy to anticipate new increases.

However, for the moment, Buteler points out that he does not see “that the Government is going to modify its monetary policy due to movements in the dollar.”

What elements can put a ceiling on the blue dollar

In that scenario, The big question is what elements to put a cap on the blue. “It may last a little longer, until the market finds a new equilibrium point,” says Quintana in this regard. And he mentions that we must not forget that June is a seasonally demanding month of pesos in the first fortnight to meet payments for bonuses, advance winter vacations, etc., which changes in the second. Thus, according to his vision, as the beginning of the new month approaches, “we are close to finding limits to the increases“.

For its part, the economist of Epyca Consultores, Joel Lupieri, indicates that, “as long as interest rates remain low, it is natural that many small investors will begin to dollarize their portfolios,” since the blue is one of the favorite assets of Argentines, whose counterpart has historically been the fixed term.

Still, forward, Analysts expect the blue dollar to still rise a littlebut the increase in the demand for pesos that usually occurs in June to pay bonuses and special bonuses in companies helps put a stop to that trend.

A improvement in the exchange rate for exporters It would boost the settlement flow and help improve the BCRA’s position for its intervention in the exchange market. That would encourage analysts’ view of an exchange rate more competitive and more in line with inflation and could relax devaluation pressures.

On the other hand, if the rise remains firm, the Government should think about reinforcing income attractions in pesos in the future to contain the flow that could go towards the blue. But for the moment, Everything indicates that it is a slight trend and they do not expect there to be changes in monetary policy to counteract it..

Source: Ambito

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