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Record free dollar: how far the rise of the currency can continue - Infobae
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Dólar libre récord: hasta dónde puede continuar la suba de la divisa
El dólar “blue” alcanzó los $1.300 para la venta, en su quinto día consecutivo en alza. Los analistas creen que la circulación monetaria y la liquidación de exportaciones van a definir la tendencia para el billete
www.infobae.com
May 23, 2024
The “blue” dollar reached $1,300 for sale, in its fifth consecutive day on the rise. Analysts believe that monetary circulation and the liquidation of exports will define the trend for the banknote
The price of the free dollar shot up 25% in May. (Illustrative Image Infobae)
The financial tranquility of the first months of Javier Milei 's Government was interrupted in May by the series of cuts in reference interest rates, which once again gave prominence to the free dollar with a price stampede.
The tension with a free dollar, which reached a record of 1,300 pesos , reached the daily press conference of the presidential spokesperson, Manuel Adorni , who ruled out any type of “intervention” to calm the rise. ”There is no reason for this to have an implication on prices, other than the inflationary problem that we are experiencing due to the imbalances in monetary and fiscal matters in Argentina,” Adorni responded.
This Thursday the informal currency gains 25 pesos or 2 percent. Throughout May it accumulates an increase of 260 pesos or 25% , well above the estimated inflation. With a wholesale dollar that rises one peso, to $890.50, the exchange gap sits at 46% , the highest since January 30 (47.2%).
However, it must be taken into account that so far this year the “blue” dollar has shown a gain of 275 pesos or 26.8% - it had ended at $1,025 on December 29 -, much lower than the accumulated inflation around 70%, which means that the dollar is far from its maximum prices in real terms.
The trigger for the recent escalation came after the Central Bank reduced the reference rate to 40% nominal annual rate on Tuesday of last week , which translates into a monthly effective rate of 3.3% for fixed terms. Although this rate is above the crawling peg or gradual devaluation of 2% monthly established by the BCRA, it could be seen as not very tempting to remain placed in pesos in the face of inflation that remains very high and an eventual jump of dollars outside the official “trap.”
The rise in parallel dollars also coincided with a weak foreign exchange settlement by agricultural exporters, below expectations of what was expected this quarter when the bulk of the harvest takes place, which reduces the currency supply. foreigner in the financial market.
“The rate cut had a strong influence on awakening financial and free dollars, it is also being generated by the lower pace of settlements,” said economist Gustavo Ber .
What is going to happen to the dollar?
Analyst and business advisor Salvador Di Stefano explained that “currency circulation has practically not changed in recent days, and what the Central Bank has done is strongly increase reserve requirements. For example, as of April 30, reserves were $6 billion and as of May 20 they were $8.6 billion, which means that money is being taken out of the market and placed there. The amount of monetary circulation was at $9 trillion, now it is at almost $9.5 trillion. Therefore, if the monetary circulation is finite, the rise of the dollar will be finite, because once the pesos run out, the dollar will not rise any more. And for the dollar to rise, more and more pesos are needed and those pesos are not there.”“Alternative dollars have had an upward trend, but we believe that it is not sustainable over time, because the State continues to have a fiscal surplus, continues to contract monetary circulation, continues to buy dollars, making it difficult to sustain this trend. On the other hand, we are days away from the IMF disbursing USD800 million dollars, with which we will be exceeding USD 30,000 million in reserves,” commented Di Stefano.
“What happens in the coming weeks could create greater volatility in the free exchange rate, generating changes in investor expectations,” warned a CMF Bank report .
“In relation to the dollar, we maintain the view that it is a market where 'flow rules' and that the total export settlements that we estimate have fallen since April, even with an improvement that is seen for agriculture. Going forward, it is key to also keep an eye on the liquidated volume of exports, both from the agricultural and non-agricultural sectors,” said Juan Manuel Franco , Chief Economist of the SBS Group.
