The exchange rate is in the center of the scene. The government clings to its scheme based on exchange appreciation and the “Carry Trade” to try to reach the elections with low inflation. But The market does not finish buying the idea that the Central Bank will maintain the “Crawling Peg” in 1% Monthly until the end of the year. This is reflected in the contracts of future dollarthat exhibit a Expectation of devaluation 10% higher than the promised by the economic team.
Despite the lack of currency, to the orders of the International Monetary Fund and the warnings of economists throughout the ideological arch on the negative effects of exchange appreciation, The government permanently emphasizes that it will hold its exchange tabthat since February predetermines a monthly increase of 1% for the official dollar.
Future dollar: What does the market expect?
The truth is that the numbers of Matba-Rofexthe main place in which the Future dollar reflects that investors are covered with a somewhat higher devaluation rate in the short term and that they expect it to accelerate after the elections.
In fact, the contract in December rose on Thursday 0.66% to $ 1,298.50 after the Bank of America disseminate a report in which projected that the dollar could reach $ 1,400 in Argentina at the end of the year. Behind the presumptions of the City is also the negotiation with the IMF, which asks the government with a greater rhythm of devaluation to release new indebtedness.
Within that framework, the consultant Econviews He stressed that futures operate above the “crawling hing.” The signature of Miguel Kiguel He pointed out that “The devaluation implicit in futures contracts averages 1.7% monthly between March and September, and rises to 2.5% between October and December” “.
This implies that even before the elections, the exchange coverage plaintiffs foresee a higher rhythm to the board of Luis Caputo and Santiago Bausili. Although, of course, expectations accelerate from October onwards.
As a result, the calculation of Econviews is that The projected devaluation until the end of the year depending on the future dollar contracts is 9.8% higher than the one that would occur if 1% monthly is sustained until December 31.
The government and expectations
The truth is that The Government seeks to anchor expectations In a context of currency scarcity. On the one hand, negotiate with the IMF A program that includes new indebtedness to reinforce reserves (the nets are still very negative), although in the City now they expect the discussion to spread more than expected.
On the other, It seeks to further stimulate dollar financing to the private sector since it became the main tool for the BCRA to buy currencies in a context in which the exchange rate extends the current account deficit. In that sense, days ago, the central partially flexible the rules that prohibited to grant bank loans in foreign currency to those who did not have income tied to the dollar, a measure that received questions from different economists.
Also, keep your INTERVENTION ON FINANCIAL DOLLARS Every time the exchange gap deals with exceeding 15%. At the expense of getting rid of reservations, he tries to expand the Spread does not impact devaluation expectations.
Source: Ambito
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