The strengthening of the dollar globally after the United States inflation data was worse than what the market expected and, therefore, the certainty that the Federal Reserve will keep interest rates high for longer, makes doubts in the market intensify. local due to the exchange rate policy implemented by the Government.
Since the Minister of Economy, Luis Caputo, announced in December the fiscal anchor of 2% monthly for the pace of devaluation, voices have been raised that have warned time and time again about the exchange rate delay. From the Central Bank, meanwhile, they respond that the real exchange rate depends on the context of the economy in general and that, within the framework of a normalized economy that produces without extreme distortions and without the main sources of instability and uncertainty that characterized the In recent years, the exchange rate is very different from what analysts concerned about the issue presume.
The argument is accepted by some operators and investment advisors, such as Lucas Lainez, director of Puente. “The exchange rate, particularly when the stocks are lifted, will depend on what economy we have when that happens. There we will see how to measure the eventual delay,” he assured.
But the cycle seems vicious. The lifting of the stocks depends, precisely, on the exchange rate not falling behind and allowing the Central Bank to accumulate dollars, something that is happening at the moment. However, the possibility of eliminating exchange restrictions does not seem as close as the market once believed, setting the date in the middle of the second quarter.
That won’t happen. Time and time again, the economic team made it clear to investors that this could happen at the end of the year in the best of cases. Only in the event that there was an extraordinary contribution of fresh funds within the framework of a new agreement with the IMF, these times could be shortened. But that is not the central bet. In fact, in a recent report after its visit to Buenos Aires, a team from JP Morgan came to the conclusion that the lifting of the stocks would occur well into the second half of the year and that the exit would be “without dollarization or convertibility” but with managed float.
The point in question, they have warned since 1816, is that the longer the lifting of the stocks is delayed and the more the exchange rate is delayed if the current exchange rate rule is maintained, the stronger the necessary correction will be “once only” they say in the Government , for unification. Former minister Domingo Cavallo has been warning the same thing for several days.
According to the consulting firm, the appreciation of the exchange rate accelerated in the last week due to the change in the international context and, according to its calculations, $800 per dollar is equivalent today to $1,480. “The RER (real exchange rate) is already at the level prior to Massa’s devaluation at $350. “Milei repeats that she will not touch the crawling peg of 2% and, if so, by June the TCR will already be at the 2016-2017 minimums, the lowest with a unified post-Convertibility exchange rate,” she warned in her latest report.
Hence, it was considered that, if the Government’s plans include releasing the stocks in the second semester, it is reasonable to believe that the pace of monthly devaluation will accelerate to, precisely, avoid a discretely larger jump at that time. In line with the North American investment bank, 1816 analysts also bet on flotation. “In the short term, the Government is going to have to decide on the new exchange rate regime. Although, with low reserves and without financing, there are not many options: the peso will have to float.”
