He blue dollar, the MEP and the CCL continue to fall freely and are already trading below $1,300. According to a survey by this media, the informal dollar fell $40 (-3.1%) on Fridaywhich means the biggest decline since July 15when the quotations of all the exchange rates parallel to the official collapsed as a result of the announcement that the Central Bank (BCRA) was going to begin to intervene in the bag to reduce the gap, Although the Government claims that this is an action aimed at absorbing the pesos in circulation.
In this way, the blue reached $1,265 and the gap with the wholesaler, regulated by the BCRA, fell to 32.4%, the lowest level since May 17 and very similar to that observed in February.
Blue dollar: the causes of the collapse
For the economist Gustavo Berthis decrease is mainly due to the “money laundering, tax obligations, moratorium and current needs for pesos”.
Along similar lines, Nicholas MartinezResearch at Wise Capital, pointed to “potential success of laundering” as the most important factor since “increases the virtuous cycle of making the peso strong and the dollar weakgenerating a supply shock, with demand currently restricted by the clamp.”
With a somewhat different view, the financial analyst Christian Buteler said that “those who launder money do not have to sell their dollars”“Most likely, they will deposit them so that the money laundering will come out at zero. There may be some selling to pay the fine by those who do not want to have their currency deposited, but I do not think it is significant,” he added.
The specialist was struck by this decline in the blue, since “the market was flat.” In this context, he dared to predict that “Perhaps in the wholesale segment there were some operations that ended up causing the price to fall circumstantially.“.
Blue dollar: the intervention of the BCRA in the CCL and the reduction of the PAIS Tax also influence
Buteler also recalled that the collapse of the blue replicates the dynamics that the CCL dollar and the MEP have been having, within the framework of the intervention of the monetary authority and one Greater weakness of the US currency globally. According to the institution led by Santiago Bausili, in the second half of July, 100,000 people were used US$326 million of reserves were required to “step on” the CCL, and it is estimated that in August that figure was similar.
It is also worth noting that as of this week the reduction to 7.5% of the PAIS tax for imports. The Government is seeking to ensure that this measure has an impact on the process of decelerating inflation through the lower cost of products from abroad.
This could reduce demand for the blue dollaras long as companies have the dollars to import, a fact that is tied to the possibility of obtaining dollars from money laundering, the RIGI, contributions from international organizations or from some investment fund.
Despite all the elements mentioned that can bring calm to the exchange markets, Wise Capital sees some warning signs that can interrupt this process, mainly linked to the dynamics of reserves.
“The process of narrowing the gap deteriorates the BCRA’s purchase of foreign currency. As the market validates this phenomenon, we will be approaching a dollar of $1,200 again.“The accumulation of net reserves is an uncertainty at the moment, but the rise in gross reserves is a fact and generates a certain security and tranquility for the market,” said Martínez in this regard.
In the short term, it is worth highlighting the idea of Ministry of Economy is that the parallel dollars shorten the gap with the wholesale dollar, which remains below $1,000. That would be a sign that would indicate that there is still the dollar may continue to fall.
What is expected for the dollar at the end of the year?
Regarding what is to come, in the last few hours data from the Market Expectations Survey published by the BCRA were released, with forecasts on exchange rate, inflation, interest rate and other macroeconomic indices made by the main consulting firms in the country.
On this occasion, the median of REM nominal exchange rate projections It was set at $961.9 per dollar for the average of September 2024, which would imply an average monthly increase of 2.0% of the exchange rate.
For The Top 10 consulting firms expect the average nominal exchange rate for September to be $964.1/USDwhile In December of this year, the group of participants forecasts a nominal exchange rate of $1,025.4/USD.
Thus, the year-on-year variation to December 2024 implied in the forecasts was 59.7% (9.8 pp less than the previous REM).
The data is part of the Market Expectations Survey that was published in the last few hours but whose survey was carried out between August 28 and 30, 2024 and includes forecasts from 42 participants, including 28 local and international consulting firms and research centers and 14 financial entities from Argentina.
In summary, Analysts see a calm dollar and falling inflation towards the end of the year.
Source: Ambito
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