Decrease the crack: looking for agreements with a dollar came up

As seen from the beginning of the year, the dollar is the variable that fears the most to change. It's not the less that it's the only one left to show something similar to a feat in one direction that has produced two consecutive years of declining product (something that has not happened since 2002), the highest inflation rate since the start of hyper 91 and the biggest loan signed by the IMF.

What is clear, on the anniversary of the first rounds of 2018, is that the Argentine economy can not withstand new currency attacks. The government knows it, and apparently also the IMF, because the rules of the game have changed and we said goodbye to the non-intervention zone on the dollar inaugurated by Sandleris management. Contrary to the theoretical framework and historical development of the Fund, now allows the sale of foreign currency on behalf of the plant in order to control its prices. That's the size of the official support.

In parallel, in the best ninth style, President Macri sent a letter containing 10 points of consensus to potential candidates in order to reduce the electoral risk, which always leads to dollarization. It is not surprising that many of the points correspond to what their own management did not achieve. Typing in the ball does not solve the question and the obvious short-sightedness of not considering the current economic situation as risky brings problems that do not dissolve after the elections and which will worsen in 2020 when the debt will have to be paid.

All the tools are on the table to tackle the exchange rate, which is around $ 46, and guarantee some stability the odd year, as there was no next day. The known absorption of pesos and the rise in the reference interest rate (which already exceeds 73%) have proved to be insufficient. Treasury auctions have been added to $ 60 million a day, but the direct sale of central reserves does not aim to directly control the price of the currency.

The nominal anchor for controlling the rest of the variables in the economy is explicitly the dollar. The news that, given the unfavorable international context for our country and all emerging markets, seems to be sighing and exporters solve their problems with greater security. However, Experts doubt the firepower that the BCRA has, given the current reserves, to stop a currency swap, but it has agreed that it can at least control the volatility that prevailed lately.

We can not expect, in this context, a substantial decline in the interest rate, that is to say that the productive sector continues to cry because we can expect new historic highs (which brings us to 2002) to try to make the weights attractive. Leaving this aside, we hope that the capacity of the Sandleris-led entity will not be jeopardized because we may need new measures to generate more funds (It's back to the Treasury) to calm the markets. And 2020? That's what we should ask ourselves.