Second, an agreement was reached with the IMF for which it will disburse some US$ 4,000 million, which will serve to pay debt with the agency itself. Thirdly, funds were obtained from international organizations for an approximate amount of US$ 3,000 million. In this way, between what is received and what has to be paid, the reserves would be rearranged around US$ 40,000 million.
The income of dollars to the Central Bank is not freeArgentina does not have a fiscal or quasifical surplus, therefore, every dollar that enters needs as a counterpart issuance of pesos.
Martin Guzman vs Sergio Massa
On July 1, he left office. Martin Guzmanreserves were US$42,358 million, and monetary liabilities totaled $9.5 trillion.
On September 8 and with Sergio Massa as Minister, the reserves amount to US$ 37,284 million and the monetary liabilities add up to $11.6 billion.
This shows us that reserves are like a crab (they walk backwards), while monetary liabilities are like a hare that runs forward.
On July 1, the MEP dollar was worth $247 and the equilibrium dollar gave us $224.
On September 8, the MEP dollar was worth $273 and the equilibrium dollar $311.
In the current situation, expectations look very positive, the minister’s trip to the United States brought calm to the markets, with his return to the country concrete measures are expected. If these do not prosper, the dollar points to $400 at the end of the year.
Foreign exchange market alert
We have many unknowns ahead of us, the first of which is what will happen to the tourism dollar, today it is trading at $260, with this price the demand for tickets abroad does not stop. The balance of tourism is showing a deficit of US $ 3,400 million and could grow more with the Qatar 2022 World Cup in sight.
Everything suggests that we are going to raise the country tax to discourage trips abroad. The second big issue is what will happen after September 30, when the deadline to sell soybeans ends with an exchange rate of $200. Producers will have sold what they need to spend a long period out of the market. Surely soybeans and alternative crops will have a big rise in the market, the government will have to choose between losing liquidity or renewing the $ 200 to the field. We’ll see which way it goes.
Imports are still closed, the dollars that the Minister obtained will not be raffled off to the market, he has to meet the IMF’s goals, everything suggests that imports will continue to be closed, the shortages will grow and inflation could accelerate.
prices in sight
With a floor inflation of 6% per month, annual inflation stands at 100% per year, any loose end will cause inflation to climb to higher levels. In the coming months, the dry weather is affecting the wheat and does not allow enough corn to be planted. This implies that food will begin to take an upward path and, if the inflation rate runs at levels of 7.0% per month, annualized inflation could reach 125% per year. Let us not rule out this last hypothesis.
Credit will be absent
With accelerating inflation, credit will become so expensive that it will be discarded by economic actors. Currently, of the total deposits in pesos, only 42% is lent to the private sector, in the case of deposits in dollars, only 21% is lent to the private sector. We have a financial system at the service of the State, which does not help the private sector, and is an anchor to economic progress.
As if this were not enough, the agricultural producer who has more than 5% of harvested soybeans in stock will have to pay a floor interest of 83.4% per year. The Central Bank is looking for friends in the field. Can you imagine if they penalize those who keep dollars, all Argentines would have a rate of 83.4% per year.
Balances that are adjusted for inflation
The balances are adjusted 100% for inflation, buying a capital asset that is amortized in 5 or more years, with an annual inflation of 100%, leaves us as a result that we have to make the effort to buy the asset, and in order to year we will pay much more in earnings. Much depends on the date of purchase, but if the good already exists in our balance, what we will pay out of profits will be obscene. It would be advisable for the government to try to modify the law, otherwise the sales of capital goods and utilitarian vehicles will drop notably.
Something similar happens with debts, who took a loan in previous years at rates below 100% per year, when they adjust the liability for inflation, they will result in a profit, which will serve as the tax base for the tax.
In short, adjusting for inflation can be a lifeline of lead for an economy that has no prospect of reviving itself.
what to invest in
The dollar at $275 is a bargain, it should be trading at least above $300. The government managed a good staging with the IMF, but it cannot do without import restrictions, stocks, differential exchange rates and deficits more quasi-fiscal tax. In short, there is no structural change in sight.
Banks put limits on fixed terms due to inflation, they limit it to $3,000,000 and make a Catalan dick to the Central Bank, traditional fixed terms are a good option, but much better are those adjusted for inflation. The monetary authority does not seem to have authority.
The bonds in pesos are suspected of a restructuring, new tenders are coming to roll payments. The sovereign bonds in dollars continue with very low prices, almost discounting a restructuring.
It is safer to buy wheat and corn to earn money than to buy instruments of the national state.
Buying negotiable bonds from Cresud, IRSA, YPF, Arcor, among others seems like a very good option, they have little liquidity, but show a return between 5% and 12% per year. These instruments pay personal property tax, but do not pay income tax.
With the arrival of the Minister of Economy in the country, a new stage of government opens, there will be no magic, we will return to R & D (Inflation plus Devaluation)
Another monetary and exchange plan is coming for October, in which Private Reports You will find the answers to the unknowns posed by the State and the strategies to take care of your savings and not get trapped in a large income tax payment.
market analyst
Source: Ambito
