He Government insists on maintaining the ““crawling peg” at 2% per month in the official dollardespite the fact that the inflation has persisted for months above that level, and that the very International Monetary Fund (IMF) recommends a acceleration. In this context, the gurus from the city They have just projected a lower exchange rate in nominal terms for the coming months but, Even so, they foresee a devaluation rate greater than 2% per month..
In it Market Expectations Survey (REM) for July, which publishes the Central Bank (BCRA)analysts estimated that the nominal exchange rate will be located at $942.50 by August 2024, which would imply an average monthly increase of 2%. But, for December, the group of participants forecast a nominal exchange rate of $1,088.20 per dollarwith a year-on-year change of 69.5% as of December 2024some 13.3 pp less than the previous report, which indicates a devaluation higher than 2% per month.
“This implies an average monthly increase of 2.8% from August to December, and not 2%,” he analyzed in dialogue with Scope The economist Pablo Ferrari, who also highlighted that the projection of the REM seems to estimate a “low” price for the dollar. But, even so, “the growth that is expected is 50% higher” to which the president aspires, Javier Mileiand the Minister of Economy, Luis Caputo“, he noted.
Dollar: how the global context influences it
In addition to the local scope, the analysts’ projections come in the midst of a “global uncertainty” that could affect currencies in the region, including the Argentine peso. In fact, last Monday, financial markets plunged in the face of the possibility that the United States will enter a recession by the end of this year.
Even the bank JP Morgan has raised the probability that the world’s leading economy will slow down in the coming months. According to the economists of this bank, the news “point to a more pronounced weakening of labour demand than expected and to the first signs of a reduction in employment.”
They also influence the war conflicts, like that of Israel against Hamas and Iransince it is about hydrocarbon-rich areas and “price makers”Ferrari added.
“Among other consequences, it could trigger ‘competitive devaluations’ either ‘war of coins’. In such a case, it would be very difficult for Argentina to isolate itself from these circumstances,” the economist explained.
Dollar: Does the market believe that the BCRA will maintain the current adjustment until the end of the year?
Financial market specialists noted that the variation of the official dollar would be tied to the lifting of the cepo. Outside of that, they find that “ The 2% monthly update rate will continue for a while“, according to the exchange operator in PR, Gustavo Quintana.
The future dollar curve The decline continued at the end of the year. This Friday it closed at $1,112.50 by December 2024. About this market, Andres Reschini of F2 Financial Solutions He noted: “The implicit rate curve in Matba Rofex, according to the adjustments of this Friday, was below the curve of Lecapswith which We could infer that the market is assigning high chances that the crawl to 2% will continue.“.
“Futures markets do not always anticipate what will happen. In fact, a few months ago they also predicted the abandonment of 2% crawling and it did not happen,” Quintana agreed.
For Reschini, the Government is doing “everything to maintain” the “crawling” at 2%. However, the analyst sees it as an “ambitious goal”, but believes that Milei’s management “has that style”, as well as obtaining “achievements that were difficult to imagine at the beginning”.
Quintana said that there could be an acceleration of “crawling” if the restrictions are completely lifted by the end of the year.
For its part, Ferrari agreed with the possibility of a “currency jump” if restrictions are liftedbut also included other variables that make it difficult to maintain the pace of devaluation, including the negative net reserves statementas well as the lack of liquidation of foreign currency by exporters.
In this context, Ferrari added: “It is not clear the magnitude that money laundering may reach, nor that of dollar income by the Large Investment Incentive Regime (RIGI), without the almost total lifting of exchange restrictions, just like the Significant inflow of ‘fresh funds’ from the IMF and other entities.” However, this would make it difficult to maintain the 2% crawling peg pattern, as analysts agreed.
Source: Ambito
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