The blue dollar has overheated in recent days in a scenario of greater political uncertainty and this Friday closed at $1,280, very close to the record. In this climate of greater instability, and in the face of proximity of the payment of the half bonusthe unknown is whether these pesos will be dollarized and thus put more upward pressure on the parallel dollars.
In the market they explain that usually the first half of June is seasonally demanding of pesos by companies for the payment of bonuses and also because at the end of the month there are expirations of the taxes on income and personal propertyand that was generally reflected in a fall in the prices of the blue dollar and financial currencies, Cash with Settlement and MEP.
However, this time the alternative dollars exhibited an upward climb at the beginning of June due to a combination of factors: the drop in rates that led to the dismantling of carry trade positions, the perception of a delay in the evolution of inflation and a lower liquidation of exporters which led the Central Bank into selling territory, which makes it difficult to accumulate reserves, among other things.
Analysts pointed out that The collection of the bonus always puts some pressure, although they predict that this year it will have a very moderate effect on the dollars parallels, unless there are more political noises.
Blue dollar: why did it overheat again?
The financial analyst Gustavo Ber attributed the rise of blue to the fact that “is being readjusted to financial dollarsaround $1,300, within a climate of marked expectation, as was the treatment of the “Bases Law and the fiscal package” in the Senate in recent days. And compared to what will happen now in the Deputies.
The blue dollar closed on Tuesday at a new record of $1,295 amid political uncertainty due to the Bases Law
Maximiliano Ramirez, an economist at the consulting firm Sur Americana Visión, agreed that “what is seen in the blue is a correction. Last week there was a rearrangement of financial dollars, but the informal dollar had remained quite fixed.” And he explained: “Many small companies that are looking for coverage are leaving pesos and going to alternative dollars, and the blue was cheaper than the other dollars, and that is why it has this bullish dynamic. Financial dollars are at $1,280 and $1,300, and blue is looking for that price. In a scenario of uncertainty, look for coverage.”
In turn, the operator Gustavo Quintana, of Pr Cambios, maintained that “there are multiple factors, but basically these days it had to do with the expectation of the treatment of the Bases Law in the Senate; the unrest derived from the process until approval could be justifying the tendency to dollarize” .
From the same perspective, the financial analyst Christian Butler, said there is “a combo of causes: the Bases Law was making a lot of noise these days, the dollar was cheap, inflation slows down, but you don’t avoid an appreciation in the exchange rate because the crawling peg is still below, the lowering of rates.”
Parallel dollars: why do they foresee a tenuous effect of the bonus?
Ramírez stated that “the bonus always puts pressure” on free dollars, but minimized the impact it will have this year in a scenario of recession and salary deterioration after the devaluation and acceleration of inflation in the first months of the year
“In previous years you used the bonus to save, but this year people have less money in their pockets, much of the bonus will be used to pay debts, and there will be little left for savings, so I don’t think it will have much influence on the alternative dollar”. The economist maintained that “in previous years, the half bonus was used for vacations, for a trip, but this year the purchasing power fell and many people are going to use that money for other alternatives, and that will mean that it will not generate so much pressure about alternative dollars”.
In tune, Lucio Garay Méndez, Eco Go analyst considered that, after paying the half bonus, “It is expected that there will be a little movement in the parallel dollars, but the effect will be limited by how liquefied the pesos were.”
Analysts predict a moderate impact of the bonus on parallel dollars
“On the one hand, the half bonus is only guaranteed for half of the workers who are formal and on top of that, salaries have lost a lot of purchasing power in recent times, so the chances of them being able to raise the exchange rate are few. It is more likely that the destination of the bonus this time will be to cancel debt and stock up because these are difficult times and when you look at surveys you see a great fear of unemployment.“he alleged.
With the same diagnosis, Carla Alegreresearcher at the Argentina XXI Center for Economic Studies, argued that “the bonus is always an element that adds pressure on the exchange rate, because it is a significant injection of pesos, which in some proportion will always be destined for the purchase of dollars.” .
“However, The recessive context will mitigate the impact, added to the restrictive monetary policy of the BCRA. There are also no expectations of future issuance as could occur last year, so the impact is likely to be slight on the exchange rate,” he stated. According to his vision, “the majority will surely use those extra pesos to pay debts, get up to date with taxes or improve purchasing power, at least at the immediate level.
Butler He also highlighted that “in general terms, the employee does not have much savings capacity such that the collection of the bonus could have a significant impact on the dollars.”
“There may be some people who have some surplus and can dollarize, but I don’t expect something massive. There won’t be as significant an impact as happened at other times. The majority will use it to pay off debts,” he predicted.
Parallel dollars: experts analyze whether there will be volatility
Ber estimated that “greater dollarization, based on the bonus, is possible after the successive reductions in interest rates and the climate of uncertainty, but its intensity will depend on the evolution of political and economic events, and therefore, there could be greater volatility “.
Analysts affirm that the sanction or not of the Bases Law will be the main factor that will affect the direction of parallel dollars
The Economist Federico Glustein He maintained that “there is an increase in poverty, many obligations to pay and we are on the eve of winter holidays, a large part of the bonus will go there.” However, the expert said that “If the uncertainty does not decrease, part of the bonus will undoubtedly go to the dollar, and it could put more pressure on it.” And he stressed that it will also influence the direction of the blue and financial currencies, the liquidation of agriculture, and what happens with the issue of the swap with China, if it is renewed or if the due dates have to be paid. There are between June and July for about US$5,000 million.
At the same time, Quintana He agreed that the half bonus will be oriented “to pay debts and consumption, and the alternative of dollars will be for those who have excess available.” In this context, the analyst stressed that the vThe value of the blue “is still well below the tourist dollar and at a time when the demand for trips abroad for vacations may increase, it influences to divert demand to that segment of the market“. And he predicted: “Volatility is installed and I think it will continue for a few days, until the political panorama clears up.
In addition, José Ignacio Bano, financial advisor, stated: “There is the particular situation of each person, and obviously, if they have debt, the bonus will be used for that. But assuming they have a surplus, since the hardest stretch of inflation has already passed, I do not foresee it being used in stock (of merchandise)”.
AND The rates in pesos are negative in real terms and have barely a difference with the rate of devaluation of the exchange rate – the crawling peg at 2% monthly -, so my presumption is that people with the surplus of pesos from the bonus are to seek dollarization again given that we see more volatility in dollars, and they are going to want to take that insurance.” And he noted that the bonus “is going to be an extra pressure factor some days, but it will not move the exchange market much.”
For its part, Ian ColomboFinancial Advisor of Cocos Capital, stated that “we do not believe that the bonus can substantially move the exchange rate, rather the progress of political events, and the consequent economic measures, are what will determine the course.”
“The dollar continues to be the safe savings, therefore, if there is no progress in political terms, the saver will react quickly against the dollar, and specifically against the blue, because it is the one that is most easily accessed. In case they leave Unleashing the political issues, we believe that the dollar, after rising around 20% in the last month and a half, is in a balance zone Therefore, it can remain at current levels. On this hypothesis, the bonus would go. directly for consumption or in some cases savings, in which case we recommend investing in common investment funds that invest in LECAPS, for those who have to face expenses in pesos in the short/medium term,” he alleged.
