For Ecolatina, a $ 100 dollar at the end of the year will be a Pyrrhic victory

In this sense, the text analyzes: “We can affirm that the calm of the foreign exchange market is only apparent: by analyzing the dynamics of the Reservations Clearly this tranquility is diluted. The firepower of the Central Bank is too affected to support interventions in parallel markets after a few months. “

“The official dollar could advance slowly in the coming months and the Palacio de Hacienda will reach its goal of an official dollar just above 100 pesos by the end of the year, but that achievement would be a victory in the end. Pyrrhus: it would become unbearable by its efforts to achieve it, ”he adds.

In contrast, Ecolatina argues that “although the Central Bank has accumulated reserves in the official market, they have remained virtually unchanged at the aggregate level. To make matters worse, net reserves have fallen by over $ 400 million over the course of the year. month, being very close to 4000 million dollars “.

And adds: “From March, the dynamics of the official dollar would start to look more and more like that of previous election years. In other words, from March, the official dollar would be further and further away from inflation, which may also decelerate, in part influenced by the fall in the rate of depreciation. “

“In this framework, although complicated, the budget exchange objective is achievable: a 13% increase in the official dollar for the remaining ten months of the year, or 1.4% per month. Even more, even if the objective mentioned by Martín Guzmán sets December 2021 as the horizon, we understand that the chances of delaying the dollar until the October elections – a real objective – are even greater. However, these “achievements” would not be achieved without some prior adjustments, “says the consultant.

Finally, the report notes that “an attempt will be made to ‘iron’ the official dollar with inflation and a greater gap than those of the period 2013-2015 (in 2011, due to lack of stocks, there was no ‘difference). the decision also involves greater risks., while the difference between the official and parallel exchange rates is an incentive to postpone sales, advance purchases, under-invoiced exports and over-invoiced imports, i.e. say to reduce the net supply of foreign currency in the country. official market “.