Why the dollar goes up: first aid manual

The reasoning is as follows: the victory of Alberto Fernández implies that President Mauricio Macri has no chance. And since he does not have them, Then, the government seems to no longer want to burn the dollars that the IMF lends to it, which the IMF itself recommends. Sandleris has consumed nearly half of the $ 5,400 million disbursements made by the Fund last month. In addition, the BCRA has net reserves of only US $ 16 billion if it is discounting loans, swaps and similar receivables.

The BCRA seems to be doing this so that the government can "pilot" politically the many weeks that separate it from a transfer of power with declining legitimacy. They think that worse than a megadvaluation, it is to arrive without dollars in October.

Without the IMF's dollars, the highest interest rate resource in the world has its limits because, as it grows, it has less and less credibility and was already at 63 percent a year. Added to this is the use of the functioning of the future dollar, which also has its limits because we always talk about past contracts and paid in pesos, they are not dollars.

That is, one of the few resources available to the BCRA to administer the IMF-approved exchange procedure is simply to let it go up, to mitigate that increase when you can, and to cross the fingers so as not to generate a social explosion. It's further away because, virtually, there is already a new elected president and the eyes are on him.

If the government is politically betting this fear (to populism, change, etc.) He was going to beat the disappointment, he was wrong. Today, disappointment seems to prevail. A devaluation jump implies a new wave of inflation and a brake on GDP. Also a huge wealth transfer from salaried households to those who have their badets in dollars. This will generate more poverty.