Hear
In Casa Rosada and in the Ministry of Economy they say they are calm despite the fact that the dollar – the thermometer of Creole stability – woke up from its dream of a summer night. In the midst of the debate between the Government and part of the market about the exchange rate delay in Argentina, the agonizing lowering of interest rates by the Central Bank (BCRA), a super weight in an economy lacking competitiveness, with high fiscal pressure and high costs in dollars, and the lack of political results in Congress appear to be the drivers of the jump in the blue and financial quotes in recent days.
The risk? The nightmare is called the exchange rate gap, which doubled in days, and the consequent expectations of devaluation. They are the same ones that, extended over time, get into the heads of price highlighters. It is worth remembering: Milei’s government wins on two fronts. The first is the decrease in inflation, the main problem for the majority of Argentines, according to surveys. The other is that of the absolute void of references in the opposition. The big question that arises is ultimately how long this jump lasts, where it stops and what impact it will ultimately have on the prices of other goods and services.
“We are not going to get upset about any particular movement,” They said near the presidential office occupied by the libertarian. “At other times, he jumped the gap [pasó en enero pasado, por ejemplo] and then he settled down,” they added near Javier Milei, where they believe that there are not enough pesos in the economy to move the values of dollars or prices.
“It would be a strange run with the BCRA buying dollars, right?” They had fun in the economic team quoting some colleagues who analyze what is happening in the market. However, the entity led by Santiago Bausili made the smallest purchase of the month today: only US$59 million. But yes, it is true, it continues buying dollars and has almost US$17,000 million since Alberto Fernández and Cristina Kirchner left the Casa Rosada. All despite the fact that Nicolás Posse confirmed that the official dollar in December will reach $1016, which implies that the BCRA will maintain its crawling peg strategy at 2% monthly.
“We have to gain competitiveness by lowering taxes, not by devaluing. “Devaluing is the mistake that has always been made,” Caputo stated on Tuesday night in front of the finance directors of the IAEF. “I care little and nothing [lo que pase con el dólar blue]. There is macro solidity and there are no pesos to put pressure on the dollar,” they said the minister suggests to those who accompany him about the jumps in free exchange rates. “We assume that with this price of the dollar, the BCRA buys dollars every day, there is fiscal balance and a shortage of pesos. Therefore, there is nothing to worry about,” confirmed an advisor.
In the countryside they had been fighting for a better exchange rate for settlement. There, 80% is sold to the official and another 20% to Cash with Settlement (CCL). These days, according to the market, They have a dollar at around $960, which arises from an official at $890 and a cash with settlement (CCL) at $1256. “This is definitely a better exchange rate for the producer and they are paying much more,” They said in a cereal bowl. In short, the BCRA’s lowering of rates was also an inducer to achieve that better price.
Several sources from the economic team do not believe that these exchange rate movements will affect the prices on the shelves, at least in the immediate future. They have a key help: the recession. The Monthly Estimator of Economic Activity (EMAE) – an advance of GDP – collapsed 8.4% year-on-year in March. Mass consumption is not picking up and, since September, the number of registered private workers (also their salaries) has fallen. Since the change of Government, there are 62,000 fewer. In the food industry, supermarkets, electronics, and automobile companies agree with the Government. There will be no remarking, for now. You look at the official dollar and, out of the corner of your eye, the gap. It all depends on the time.
“The consumer is king. Before there were pesos and he validated increases. That doesn’t work anymore,” they defined in a food company. There, they said, increases cannot be transferred and, more than paying attention to the dollar, they are in a fierce fight with suppliers for the values in the chain. “We look at them attentively [a los dólares], but we are in another mode: to see how we can lift the brutal drop in sales and for that we have to maintain prices or lower them as we did this month. “There is no room to go up,” They counted in another firm. The “Round Prices” program that Danone will launch these days will go down that path, for example.
“There is no room to raise prices with the drop in volume. We have to be attentive and see how it evolves [el tipo de cambio]”they assured in a mass consumption multinational.
In supermarkets, as always, they distrust the industry. There they wait to see if it is cut [la suba del dólar] or not climbing. “A couple more days like this and he’s going to hit the charts,” they anticipated.
Automotive companies, meanwhile, promise to maintain their prices if the official dollar remains stable. as usual. They even talk about an “opportunity” for the declining sales, between 20% and 30% in the first months of the year. With the blue and the CCL rising, the pesos go further to access the priceless 0 km. “There are plenty of cars. “There is no room for markups at dealerships,” they counted in the companies.
In the world of electronics, a good extremely tied to the evolution of the dollar and whose consumption depended in recent years on expectations of devaluation, they repeat the same thing. The drop in sales does not leave room to increase prices. They fell between 40% and 45% on average. In a few more categories. “The main problem is that there is no consumption,” they told this medium, despite the fact that some pay for the CCL. In these companies, many of them in Tierra del Fuego, they light candles for San Cuota Simple.
In the business world they repeat (do they believe it?) that what is valuable is the official dollar. And they give two important pieces of information: despite the increase in the gap and the financial figures, not only are sales falling, but the Government also began to normalize foreign trade and also the distribution of dividends, which eliminates pressures. An example: today you could see photos of Brazilian sliced bread on the shelves of Unicenter’s Censosud supermarkets. It is estimated that the variation in imported goods between April versus an average from January to March shows an increase in imports of 35% in basic basket products and 21% in medicines. “Four teams of 20 tons each are arriving [con panes]. “What was seen today in some places is a truck that entered on Tuesday.”they said.
Economists who are consulted by companies understand that a greater gap fuels devaluation expectations. Finally, it seems that the officer is late. Thus, the companies’ treasuries are put on alert and stop liquidating stocks – today there are plenty – at a cheap dollar price. “If there was a feeling of tranquility and disinflation, this puts you on alarm,” they counted.
“The last rate drop was too hasty, agonizing,” commented one of the most listened to men in the market. “They want the banks to switch from Passes to Government debt. They are obsessed with the issue of the Central Bank’s liabilities. It’s a mistake. They lowered the rate and now the implicit rate in dollars was very low. With the movement of the exchange rate, people begin to get nervous and if you wait for the exchange rate to move, it is like the rate does not pay for that expectation, and it can speed up everything. But the fundamental thing did not change: the commitment to fiscal balance,” he stressed.
How far will the dollar go? The economist Fernando Marull left a clue, an account that the market makes: monetary base plus remunerated liabilities divided by gross reserves. Last week, the result was $1600. However, with the decline in the “pass ball” – they fell by $10 billion on Monday – Today the account gives you a CCL of $1300. Will that be the margin for growth? Some believe so. The rest, of course, will depend on fear, distrust and uncertainty, intangibles inherent to the Argentine economy since forever.
