How the narrowing gap is impacting the economy: good news for the BCRA and the effects on certain sectors

The parallel numbers of dollars and the exchange rate differential will surely be a daily relief these days for Martín Guzmán and Miguel Pesce. Is that after months of monetary stress and a threatening distance between the different exchange rates, a combo of official interventions and the flow of foreign exchange for the payment of the wealth tax has made it possible to prolong, at least in the short term, the calm of the exchange, with a difference of around 60%, while the government awaits the arrival of the heavy harvest.

This is the good news to which an economy which has accumulated three years of recession aspires. This step, with the MEP dollar about $ 137 per dollar CCL at $ 140 and the blue at $ 147, okay below the “ savings ” of the dollar ($ 155), relieves pressure and discourages speculative maneuvers, that in recent months had committed the reserves of the Central Bank and They prompted the agency to tighten stocks and restrict access to foreign currency for imports and luxury goods.

“It can help contain expectations and that’s what the counterfactual is for, It would be a problem. As with the debt problem, that if it was left unaddressed it gave way to a default that accelerated the spread and inflation is not much help, but it removes the problems of a reverse scenario ”, he says Matías Rajnerman, Chief Economist of Ecolatina.

The closest episode occurred in September 2020, when the gap widened and the blue dollar came to $ 195. At this moment, the Central Bank has adjusted currency controls to take care of its reserves, while inflation in October accelerated sharply due to this surge in the dollar.

“A larger gap creates problems, because there is more incentive not to liquidate exports or not to invoice them, or also to anticipate imports. The gap today is not small, but there are values ​​that one company can agree to do and another cannot. At 100% there are firms which are encouraged to elusive maneuvers and at 60%, no, ”warns the analyst.

Your colleague Fernando Marull coincides with this diagnosis concerning foreign trade, which gives more air to the Central Bank and its search for reserves. According to the analyst, director of FMyA, “The slightest deviation has advantages because there is not much retention of exports And, although importers keep asking for dollars, because the official exchange rate seems cheap, there is a slowdown. “

For the economist, who worked on at the Ministry of Finance during Cambiemos’ administration, this decrease in the gap reduces “devaluation expectations” in the future, but it also generates negative consequences for economic activity. His analysis points in particular to sectors which, in recent months, have experienced a recovery driven by the exchange rate differential, such as the sale of 0 km cars or construction.

“Closing the gap affects the middle class more, because those who earn with a large gap are the businesses and families with dollar savings. When the gap widened, a wealth effect was generated which made construction rebound, with more demand for materials, more jobs and today it is 11 points above its level of ‘before the crisis.. Conversely, the fall in the gap deprives the purchasing power of the dollar saved and everything that was inflated slows down a bit, because the currency appreciates and costs increase, ”concludes the analyst.

In all cases, the analysts consulted by THE NATION do not project a long-term impact, as they prevent the reduction of the gap is not anchored in structural changes in the economy. In addition to official intervention, with the sale of bonds in the market, they warn that there is a favorable impact of foreign exchange income for taxpayers affected by wealth tax, who sell part of their dollar assets through parallel exchange rates.

“The spread is a reflection of market uncertainty. If the appearance of an economic plan is delayed, as it does not appear, if the agreement with the IMF is delayed and if the government does not succeed in channeling fiscal and monetary variables, this path to reduce the gap is not sustainable. It can overheat. The exchange rate differential ultimately reflects the uncertainty of the economy, “ said Juan Ignacio Paolicchi, economist at Empiria.

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