The dollar rose much more than the inflation, the construction index and the value of cars, maybe it’s time to arbitrate. The world scenario is not the best for Argentina.
The United States is debating the debt ceiling, this involves whether Congress gives more money to the Treasury to finance the fiscal deficit. The United States has a high fiscal deficit, which it does not plan to solve in the short and medium term, ergo We are in a scenario where the dollar is going to devalue worldwide over time.
Inflation in the United States does not stop, this forces the Federal Reserve to continue raising the interest rate. We are facing the most important rate rise in the last 40 years, and it could be 5.5% per year.
Oil, which used to be worth $130, is now worth less than $70 a barrel. Russia does not stop selling oil at a discount rate of 30% to China and India.
The drop in oil drives down soybeans and corn, since they are substitutes as fuel, but they also fall due to the overproduction of soybeans and corn in Brazil with 155 and 125 million tons respectively.
Copper is falling and this is due to less buying by China. This drop in activity in China also influences the prices of grains and livestock.
In this global economic context, Argentina has few chances of being able to have a significant economic recovery in 2023 and 2024. In the first place, we have very low prices for the products we export; secondly, our neighbors are also affected by the international context; thirdly, there is no investment migration from the central countries to the emerging ones and, fourthly, Argentina should show better fiscal indicators to think about an improvement in its financial assets, such as bonds and shares.
In the current situation, the reserves in dollars in the Central Bank have been parked at levels below US$ 33,000 million, while monetary liabilities are already around $20.0 trillion, this leaves us as a result a short-term $600 dollar price target.
In the first days of June we will have a dollar offered since entrepreneurs need to sell to cover structural expenses, but, in the second half of June and with the presidential candidates defined, we believe that we can have a very buying wave of the dollar in the market .
The dollarization of the portfolios begins 45 days before the electoral actthis year the primary elections on August 13 will be definitive, and surely from July 1 onwards the process will begin dollarizer. The best thing will be fifteen days before buying.
Inflation for the month of May would be between 8.5% and 9.0%, with which the interest rate once again fell behind, since banks offer 8.083% per month, while the devaluation rate of the peso it parked at 7.5% per month.
The international context is not smiling on us, with falling commodity prices and rising interest rates, this does not help to bring in more dollars.
The drought left us with fewer quantities, the agricultural dollar does not seduce when the producer knows that, in the medium term, he will have a scarce product in his hands.
In Argentina we continue with high inflation, the fixed-term interest rate does not cover inflation, as well as the devaluation of the peso, all this makes investors look to the dollar as a refuge or lifeline.
The electoral result of the elections on August 13 could generate a strong rise in stocks and bondsif those who are elected mostly profess free market ideas and are against an economy with a high degree of intervention.
He Dolar blue in the last 5 years it rose more than many assets, maybe it would be time to arbitrate from dollars to stocks or properties. The dollar in May 2018 was worth $25, it rose 2000%. In 5 years inflation rose 995%, shares 1093% and the construction chamber index 1,245%. Maybe it would be time to arbitrate, but as Karina Olga would say, “I leave to your judgment”.
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