tickets looking for a new destination and other possible consequences

The announcement by the Minister of the Economy that the depreciation The wholesale exchange rate will be 25% until the end of the year has been analyzed over the long weekend by businessmen, bankers and economists.

Martín Guzmán changed the heart of his exchange rate policy suddenly and without bombastic announcements, which until last week was determined because the dollar would adjust to inflation and now he is ruled by the “dollar-Guzmán” who argues that the wholesale tariff will cost $ 102.40 by the end of the year.

With the wholesale dollar closing on the Friday before the carnival holidays at $ 88.54, the increase by the end of the year to reach the dollar-Guzmán it would be 15.25%.

This 15.25% increase in the exchange rate through December
(probably only after the October elections) it turns out otherwise limited for savings with inflation forecast between 40% and 50% by 2021.

Doesn’t Guzmán know that? Of course you know that, but your strategy is flatten the rising dollar which governs both exports and imports in an attempt to reduce inflation somewhat, which after 4% in January (which was added to 4% in December) lit all the red lights of the economic-electoral commission of the government.

To get an idea of ​​the possible consequences of the dollar-Guzmán, it should be borne in mind that now the official dollar is expected to grow at a rate of 1.3% per month until the end of the year instead of the 3% to 4% which had increased in recent months so as not to lag behind inflation.

Thus ended at least two ideas the government had on the dollar question. One of them, that they wouldn’t allow a new delay of the real exchange rate. The other, older and more misleading about a rising dollar it would not have to affect the prices of the family basket in the domestic market.

And it is the global weakness of the dollar with the consequent rise in cereal prices (the soybean icon above US $ 500 per tonne, added to the rains of recent days) that encouraged the government to try a new a certain delay in exchange this allows him to stand up better in the October or November elections.

Of course, unlike other experiences of the exchange rate delay in election years (the most striking was that of 2011, when Cristina Kirchner won with more than 50% of the vote), today the Central Bank he has few reserves and much to pay.

In 2011, with the comprehensive cheap dollar strategy, the foreign exchange flight jumped 90% from the previous year and amounted to US $ 21,504 million despite the exchange rate that Cristina Kirchner inaugurated after the elections.

A comparison that reflects the current weakness of Argentina’s exchange rate is that that stocks allowed the purchase of 2,500 USD and the current one, much more restrictive, allows US $ 200.

One question is whether the government, by controlling the official wholesale dollar, will also succeed in controlling the free dollars, counted with liquidation, the stock market and the blue or parallel ticket, which is $ 150.

For weeks, the Central Bank has been selling “liquidity with liquidation” in an attempt to reduce the exchange rate “deficit”, which stays above 70%, and this is an indicator that the fever is still high.

The Central’s strategy is to sell dollarized bonds (AL30) and absorb pesos but, on the other hand, to buy AL30 using reserve dollars to avoid a fall in the prices of these same bonds.

The result of this strategy, according to economist Federico Furiase, has been that since November, the Centrale has sterilized 95 billion dollars and allocated US $ 600 million from reserves to support AL30 prices. Can you do it for a long time?

In the market, it is said that Miguel Pesce He has US $ 4.4 billion left in AL30 to keep the CCL at bay.

For the “blue” dollar the official remedy, in addition to having disarmed the “mash” or “roll” by negotiating less than the solidarity dollar (the quota of US $ 200 sold with an additional 30% and 35% as an advance on profits), “Empty” of pesos that comes from the collection of taxes.

Among the advances on income taxes, personal property, the additional advance on foreign assets and the payment of wealth tax, the “vacuum cleaner” of the state’s pesos will be felt intensely in weeks to come.

Operators estimate that at least a third of the $ 200 billion wealth tax it will be paid at the end of March by selling dollars on the CCL. Would have 500 million USD supply in a market where the Central Bank is today almost the only supplier.

With the market playing the dollar-Guzmán and more controlled, money begins to seek other directions in the new panorama.

In short: bonuses are becoming attractive adjusted by CER (inflation like those called TO21 and TX26) and they lose the well-known “dollar-linked” linked to the exchange rate which was in high demand until the end of last year.

The dollar futures at the end of the year, which in October was at $ 140 the official, is now trading at $ 125 and the futures rate which was 80% at the end of last year these days. this is at 40% per year.

Fixed rate bonds are also gaining popularity, with the understanding that if the government plans to devalue less, the interest rate on term deposits would not increase either.

The dollar-Guzmán bet to erase the idea that inflation will be 50% this year is on the table and players are starting to move with the expectation of a new framework for what constitutes one of the most important values. safe for Argentines: the dollar.