The Government’s challenge is double: tame the dollar without disarming the disinflation process, and sustaining the calm climate beyond the electoral calendar.
Argentina travels a delicate balance between inflation that goes down faster than expected and an official dollar that begins to show tension, just in the prelude to the legislative elections. The key: an active central bank, which does not hesitate to intervene to sustain financial calm, while economic policy tries to sustain the nominal anchor in an increasingly complex context.
In June, INDEC confirmed an inflation of 1.6%, below the 1.9% projected the market. This is the second consecutive month with increases below 2% and consolidates a path of disinflation that, if sustained, could close the year with a rate below 45%. The annual fact is already located around 39.4%, a floor unthinkable at the beginning of the year.
But while prices slow down, the official exchange rate begins to reheat. On Tuesday, the retail dollar reached $ 1,291, marking a new record. The BCRA reaction was immediate: it activated sales in the futures market to iron devaluation expectations (with implicit rates around 27% for July and 30% for August) and absorbed pesos, which pushed the 40% bond rate. In the current aggregate regime, that double movement did not go unnoticed: The central made it clear that it will not let the exchange rate complicate the priority objective, which is the deceleration of the inflation.
Electoral context, the backdrop
The backdrop is political. Less than three months from the legislative of October, and with the province of Buenos Aires as the main battlefield, The Government is committed to preserving financial stability as an electoral asset. While surveys begin to reflect a rebound of the ruling, The economic team’s strategy is to reach November with inflation below 2% monthly and without exchange shocks.
The June inflation fact is encouraging and validates the government map of the government. In this scenario, we recommend A conservative position for retail investors: fixed deadlines in pesos, CER funds and short -term dollars, instruments that offer coverage without resigning profitability.
Stability, for now, is supported. But the challenge is double: tame the dollar without disarming the disinflation process, and sustaining the calm climate beyond the electoral calendar.
* Front Investments CEO
Source: Ambito
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