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The harsh forecast of the “Tsar of Finance” on the dollar and the exchange rate stocks

The harsh forecast of the “Tsar of Finance” on the dollar and the exchange rate stocks

The analyst Leandro Ziccareli, known to the general public as “the Czar of finance“, analyzed the exchange front in the middle of the blue dollar shot, which reached historical highs, and predicted the possible scenarios that the Government may face with the market if corrections are not made. A key point: How much life does the exchange rate have left?

Ziccareli discredited the Government’s arguments, launched in the mouth of the president himself Javier Milei and the Minister of Economy, Luis Caputo, regarding that the rise of financial dollars and blue They are a product purely and exclusively of the delay in approval of the Bases law, which remains stuck in the Senate, with an almost certain return to Deputies due to the modifications it will undergo.

“The market discounts that the Bases law is going to come out. As it took so long, there may have been some noise”, he claimed. On the other hand, he considered that the lack of a plan for the Government to release the exchange rate trap and the reduction of interest rates.

In this regard, Ziccareli said: “The run is on parallel dollars. And the rumor in the parallels, more than buying, is that they are selling. I don’t know if they are selling; perhaps a helping hand helped calm the waters a little yesterday. But you have a run; 18% in four days, you can call it a mini run. The BCRA buys reserves in another exchange market, it is not an excuse for it to buy reserves. And buy because there are stocks.”

What will happen to the dollar stocks?

“At some point the trap abandons you.”. It has limits. It doesn’t allow you to do anything, or do the things you do inside the stocks for a long time. The lowering of rates was already finding a limit, and that is why I said that at this pace, which was accelerating, at some point there was going to be a mini bullfight,” said the author of the podcast “Financial, Monetary, and Irreverent.”

And I add: “Milei and Caputo’s statements about how and when we are going to get out of the stocks end up generating noise. Because today the most likely scenarios are that they end up stretching the stocks more than they should, or that they take them out from one day to the next and push us all”.

“Neither of the two scenarios are the base scenarios that we thought of, nor are they what one thought was optimal and consistent with what they are doing, which is to gradually remove regulations and make a gradual exit,” Ziccareli insisted.

Furthermore, he considered that “the stocks are going to abandon you at the latest in the last quarter of the year, the gap is going to fly and we are going to have a serious problem. I think that for the macro, this gap is more normal than that of the dollars almost stuck together.”

What will happen to the blue dollar?

Specifically about the jump of the blue dollar, the “Tsar” stated: “The bullfight itself is finding a turning point. And I think it was Wednesday. What happened yesterday, when it calmed down, regardless of whether there was intervention or not, I think is the most logical thing. Yes, we are fine here; she stopped. Today there may be a little more noise.” He also considered that if the escalation is stopped now it should not have a great impact on inflation.

“This bullfight has a very large internal component. It was not made by foreign funds, nor by people going abroad. And you realize why what reacted the most was the MEP dollar. She started with blue and continued with MEP. There is no entry and exit of funds there,” she said in statements to Radio con Vos. He also highlighted that a large liquidation of foreign currency by the countryside has not yet been perceived, which generates greater pressure on the exchange front.

Do the markets let go of Javier Milei?

Asked about the “honeymoon” between the Milei government and the markets, Ziccareli analyzed: “Whether the party is over or not is a good question. That’s why I say that if you don’t abandon the trap in a moment, the trap abandons you. The market party trusting in Milei may last a little longer, but as long as it does not see a plan to get out of the stocks in the second part of the year, the market will turn around. Because markets “vote”, they have preferences, but they do not militate. If the market does not close, no matter who is there, at some point they stop accompanying.”

“It happened to Macri, that the market told him game over before even Peronism was organized (…) the same thing could happen to Milei if from now on he does not give a roadmap to get out of the trap. If the market does not see signs, it will anticipate, it will turn around, and we will have a problem,” she concluded.

Source: Ambito

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