The agreement with the IMF will be made if the current economic plan is respected; Otherwise, we can live without the IMF. Opportunities in bonds, quiet dollar.
Tense week in the market, while many analysts expected an imminent agreement with the IMF, others were more cautious and wreck until they clarified. The result was clear, The cautos came out better than the optimists.
Argentina has an economic plan that has as pillars the fiscal surplus, low level of weights in the economy, and positive interest rates. This resulted in low inflation, a weight that has been revalued, and in the first 15 months of the government, despite having negative reserves, the dollar ticket only increased 20%, while inflation rose 180%. The Widows of the Blue dollar are very watering.
The monetary base for a long time was around 10% of GDP, today does not reach 4.0% of GDP, the monetization rate that is the sum of the monetary circulation plus private deposits in pesos reach 15% of GDP, approximately approximately equal to November 2018. Without sufficient pesos in the economy, alternative dollars hardly upload.
The government that assumed in December of the year 2023, inheriting a huge debt in imports, placed the famous Bopreal Bonus and ended by calendarizing payments that allowed him to catch up with the debts. Then the arrival of US $ 22,000 million of the money laundering allows to increase bank deposits, and this resulted in a considerable rise in dollars to the private sector, which today are located at $ 13,530 million to February 24. We must emphasize that the dollar deposits of the private sector total $ 30,452 million, which is why there is room for dollars to continue growing.
The Central Bank Argentina (BCRA) approved the regulations by which those who are not in the export chain can be provided in dollars, this occurs, if and only, the financial entity that grants it has a line of credit from abroad, or issued a negotiable obligation, in both cases these instruments are used as funding of loans. Dolk deposits in the system are only used for dollars to those in the export chain. No prudential macro rule is violated.
The economy in the year 2024 showed a contraction in the GDP of 1.8% per year, to the extent that the economy grows, we will see a greater demand for dollars for financing. If these dollars before reaching the hands of those who request the credit are sold to the BCRA, we have assured an improvement in the important reserves for the following months.
By 2025, most analysts expect an increase in GDP between 4.0% and 5.0% per year, this would imply a rise from 12% to 15% of imports. In 2024, imports added US $ 60,822 million, which would need to finance imports for a sum between US $ 7,300 and US $ 9,123 million. For this, it is necessary for capital to finance this arrival of imports, which come to push the investment.
The gross passive position of direct foreign investments was recently known, as of September 30, 2024 added US $ 171,795 million, while as of December 31, 2023 reached the sum of 130,302 million, which represents an increase of 41,493 million.
Conclusions
. – Nothing presumes a exchange leap in Argentina, there are few weights in the economy, the reserves are negative, but the public sector fiscal surplus and an important investment current makes the dollar remain very quiet. By 2027 the market expects energy and mining exports to exceed agricultural exports, which will have a much more solid dollar position in the BCRA.
. – The agreement with the IMF will arrive sooner rather than later. The Government wants a disbursement of funds that allows it to lift the exchange rate, but without resigning the solid bases of the economic plan. In the event that the IMF intends to impose a plan other than the current one, the Government will not take the financing of the agency, and the departure of the stocks will be postponed.
. – The most important thing in the short term, is to consolidate the decrease in inflation, improvement of real salary, and a substantial decrease in poverty levels. All those who propose a devaluation will go against a program that integrates employees and low -income citizens to an improvement in their quality of life.
. – The country risk increased to the 770 points area, a window of opportunities opens to buy public titles. The Al35 bonus in dollars is worth $ 63.80, pays a pocket rental of US $ 4,125 per year, this gives you a pocket rate of 6.47% per year. This without counting the probable revaluation of the bonus, an agreement with the IMF should position it around US $ 72.50 which would result in an additional capital gain of 13.7%.
. – Actions are an object of desire at current prices, but market dynamics can place them in lower than current prices, bonds to these prices are a real bargain. If the government comes with the possibility of winning the mid -mandate elections, nor tell you what they will rise.
Source: Ambito
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