Following the announcements on Friday by the Minister of Economy, Luis Caputo, and the president of the BCRA, Santiago Bausili, financial exchange rates have soared to new records and do not seem to be stopping.
The exchange rate peace is already old history. Financial exchange rates and the blue dollar have soared to new nominal highs and the buzz continues. The announcements made on Friday by both the Minister of Economy, Luis Caputo, as the president of the BCRA, Santiago Bausiliregarding The migration of debt from the financial institution to the Treasury left a bitter taste in the mouth and now the market is demanding more certainty.
“I think that The Government must be quite nervous product of a significant fall in Argentine bonds and stocks, which have already been on a downward trend in recent weeks. In addition, in this context it is beginning to be worrying the sustained increase in country risk and the financial dollar“, he told Ambitthe Economist Joel Lupieri by EPyCA Consultants.
It should be noted that on this day, Dollar bonds fell again, although they moderated their initial losses, while country risk reached a maximum of almost four weeks (1,570 points). For its part, the blue dollar It seems to have no ceiling as it reached the nominal record of $1,430 and The gap is already the largest since the devaluation last December. At the same time, the MEP and the CCL They were not left behind: the cable dollar climbed to $1,428.72 and the “bag” arrived at the $1,428.46.
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Dollar: the signals that the market is waiting for and that have not yet arrived
For Lupieri, one of the decisions that the Central Bank could take to moderate the rise in parallel exchange rates would be “raise the interest rate” of the Fixed deadlines and thus prevent the majority of less specialized investors from rushing to buy dollars. However, “The government does not seem to be in that dynamic, even more so with the latest statements that the Central Bank will have greater independence”the expert explained.
He therefore predicted a period of “greater tension and a little more challenging than it was in the first six months” and warned that “There will be fewer dollars from agricultural sources, which means that we may see a Central Bank under pressure from several fronts.”
For her part, the economist Elena Alonsoalso in conversation with this medium, said: “I believe that the market is looking for Concrete measures regarding the lifting of the cepo and in favor of those who liquidate reserves, which is the ‘blend’ dollar. The exchange rate gap has to go down for them to start selling dollars, otherwise a dollar close to $1,500 will generate much more uncertainty.”
If the gap between the wholesale and parallel exchange rates continues to widen, Alonso considered that this will cause “a general halt in a lot of decisions, not only financial, but also economic, of companies and SMEs, because they generate business without knowing how much to cost for what they import, or how much to sell for what they export.”
Dollar: where will the focus be in the coming days?
“Going forward, we repeat that The focus will be on both the flows and the fine print of the recently announced measures.especially in relation to the interest rate of the system that ultimately emerges after the measures. We remember that the fall in dollar flows occurred in a context in which the BCRA strongly lowered rates to contain monetary expansion due to interest, something that had as a consequence the reduction of the attractiveness of the ‘carry trade’“, said Juan Manuel FrancoChief Economist of SBS Group.
In this new period, it was announced that The BCRA will stop issuing money to finance its remunerated liabilities, once these instruments are transferred to the Treasury, with the new Monetary Regulation Letter. One of the market’s doubts is how much fiscal cost will this entail.
Source: Ambito
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