Dollar: Fausto Spotorno explained why the Government can lift the exchange rate in the short term

Dollar: Fausto Spotorno explained why the Government can lift the exchange rate in the short term

Since the beginning of the management of Javier Milei The market expects sufficient conditions for the Government dismantle the exchange rate. Expectations were renewed at the hands of a stable dollara gap between financial and the wholesaler around the 20% and one inflation that continues to slowin September it stood at 3.5%, according to the National Institute of Statistics and Censuses (INDEC).

One of the most listened to economists, Fausto Spotornowho is also a former advisor to the president, was optimistic about the conditions needed to finally lift exchange rate restrictions. “We see that a scenario is being built that facilitates exit from the stocks”he stated in an interview with A24.

However, the economist warned that “It is not so clear that this is the definitive scenario and that it will remain that way”. Spotorno recalled that something similar in conditions happened in May, but suddenly there was a rebound in the dollar, inflation and the gap grew to 60%.

In that sense, the specialist explained that the rise in the currency occurred “due to international conditions that accelerated the outflow of capital from Latin American countries” and because the Argentine government “lowered the interest rate too much.” Although, “now it seems that things are starting to improve again,” he noted in reference to the lower interest rate of the United States central bank, which makes more funds available for Latin America.

Appreciation of the peso: is it worth investing in Argentina?

Fausto Spotorno highlighted that although the peso is repairing “very quickly”, even more than the real is appreciating in Brazil, Argentina still has “attractive” conditions, since it is not “so appreciated yet.” as analyzed.

In turn, he noted that “all the exchange rates we have in Argentina are compressed between 1,000 and 1,200 pesos.”

Previously, the economist had said that in Argentina “we are close to achieving the conditions that the Government wants” to get out of the trap.

Stocks: what are the three conditions that must be met, according to Fausto Spotorno

Among the conditions to get out of the trap, the economist listed three conditions that should be met:

  • Exchange gap: that is, the difference between the free dollar and the official dollar will shrink, something that is already happening.
  • Inflation: make it 2% or 2.5% monthly.
  • Reservations: “What we are seeing is that the Central Bank (BCRA) was buying reserves and it is expected that there will be an increase due to reserve requirements, due to the people who are entering into money laundering,” Spotorno highlighted.

Furthermore, the analyst added, by way of context, that in the last month of the year there is the wheat harvest, with additional dollars entering the country, an increase in demand for pesos, the end of money laundering, “with which you will have more reserves in the Central Bank”, and the definitive removal of the COUNTRY tax.

In that order, he highlighted that “any devaluation or inflationary shock that may occur due to the exit of the stocks will have a compensating effect”.

“Seeing these conditions, December will be the best time to get out of the stocks”he estimated.

Source: Ambito

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