The economic scenario is still being developed under the logic of an economic program with fiscal surplus, sanitation and capitalization of the Central Bank, without monetary issuance, and with a financial system where the State ceases to be a credit demanding, which abruptly changes the dynamics of the market.
The reserves today are located at US $ 38,346 million, and the monetary circulation at $ 21,663,279 million. If the dollar goes to the roof of the band that is located around $ 1,414, US $ 15,474 million would be needed to leave the economy dollarized. The dollar is below half of the band, at $ 1,135.5, and the band has an apartment around $ 990.
The Argentine financial system changed radically during the current administration, the monetary policy rate is painted in 29% per year, it is not a reference to anyone, since the market sets in accordance with the supply and market demand.
Banks no longer lend the State, therefore, they have to look for profitable projects in the private sector to apply the funds they get. The collection of pesos and dollars is increasingly complex. There are few pesos in the market, and the remuneration of fixed deadlines is increasingly high, for a fixed period between one million pesos and more than 1,000 million pesos, average remuneration is between 32.5% and 34.5% per year.
The high collection rates, plus lace that banks have to constitute, make active rates (loans) located at very high levels, around 50% annual nominal rates, which if you lead it to effective exceed 60% per year.
The level of rates in the economy is determined exclusively by the market, if there are few pesos the rate will remain high, if the economy is monetized there are chances of a decline in the interest rate.
For the economy to be monetic, it is necessary that the exchange rate falls to $ 990 and the Central Bank buys dollars and injects pesos into the market. Until this does not happen, it does not seem likely that the rates go down.
These levels of interest rates are not appropriate for many businesses, especially for those that have low rotation and profitability. At some point, we will see merchandise settlement at lower prices or sale of dollars, since earning money with these financing rates is unfeasible. Businesses made intensive capital.
Another reference rate is fixed by the Government every 15 days when it goes out to tender letters to the market, today a letter at 45 days yields 30.65% per year, while 135 days it yields 30.5% per year. Obviously there is an interest rate at different deadlines in what the government pays when financing.
The inflation rate expected to 12 months according to our consultant would be around 15% per year, with a dramatic fall in the inflation rate from October onwards. A world recessive scenario, with prices deflation in China and a strong drop in the price of international freight, would precipitate a very important decline in internal prices, this added to the government’s policy of non -monetary issuance and fiscal surplus.
Assuming that we are wrong, and that the inflation rate for the next 12 months is 20% per year, a fixed term rate pays you 10.4% per year above the expected inflation, while the LECAP rate pays you 8.75% per year above the expected inflation. The bond in pesos is in 28% per year, this would give a positive interest rate against inflation of 6.7% per year. These rates would be much higher if the inflation assumptions of our consultant were taken. With a dollar on low looking for the band of the band, and interest rates in such positive weights, the business is more sung than the song Despacito.
Conclusion
. – In the coming months, many negotiable obligations will be issued that will provide a great offer of dollars to the market, we are talking about the issuance of the following companies, Vista, Pluspetrol, Aconcagua Energía, Pampa Energía and Telecom. To this, we should add issuance of approximately US $ 1 billion in the provinces of Córdoba and Santa Fe.
. – The soybean harvest is estimated at 50 million tons, the bulk enters from April to June, therefore, we believe that this contributes so that the exchange rate falls.
. – The monetary policy rate is painted, today the rate is fixed by the market in the free game of supply and demand. The Cutting Rate of the LECAP coexists, with the fixed term rate that is set in the financial system.
. – The high active rates are the product of the choice of investors to remain in dollars, and not take advantage of the excellent businesses in pesos offered by the market.
. – The fixed deadline in dollars is between 3.0% and 4.0% depending on the deadline and the moment to be placed. The dollar bond in the financial system is between 2% and 3% per year.
. – The shares have a great route ahead, the dollar bonds between the strong yields of the instruments in pesos.
. – October elections are a goal to crown great profits in the market, whether measured in pesos or dollars. Risk country with bow at 550 points, and there begins another game.
Source: Ambito
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