What will happen to the dollar after August 11 | …

The dollar will remain calm until the STEP elections, which will be held in two weeks on August 11th. Depending on the outcome of the vote, there may be pressure on the exchange rate, but this would not generate shocks in the tools available to the Central Bank. This is what three economists consulted by Page I12, which predict that the dollar will remain around 44 pesos, without exceeding the ceiling of 51 pesos established by the Central Bank. However, they warn that if an exceptional demand for dollars is recorded, the monetary authority's maneuvers would only serve for the short term and it would be enough to contain the pressure until October, the month that coincides with the elections. General.

The Central Bank has four tools to maintain the exchange rate without variations in the face of the OSP and even after the main ones. "The plant has reserves (available) of $ 20 billion, plays hard on the future dollar market, keeps the interest rate at a high level and encourages the international carry to reach speculative capital," said Jorge Carrera, former head of research at the central bank. For Carrera, the reason the dollar has been "ironed" for months is electoral: "Without positive economic results, with a major recession and inflation remaining high, the only positive thing they have to show is the calm dollar. " .

Federico Furiase, economist and director of the consulting firm Eco Go Study, agreed that the dollar would remain stable until the OSP and until the general elections of October: from one party to another. precautionary carry trade. But the Central Bank will mark the ground to limit volatility. "

However, pressure on the exchange rate will vary depending on the outcome of the primary elections, according to Furiase. "If Macri loses 2 points or less, the Forex market will have peace of mind, and even country risk and interest rates could be lowered. If Alberto Fernández wins by 7 points or reaches 45% of votes, there could be a financial destabilization, "said Furiase. He also explained why this asymmetric market reaction is due to the two candidates leading the polls. "The market believed Macri when he added Pichetto to the formula because he thought the Peronist candidate would give him governance and allow him to go through Congress to make key structural reforms. But Cristina Kirchner did not believe in moderation with Alberto Fernández. He is panicked by a currency exchange and a debt restructuring, because of what happened to Kirchnerism from 2011 to 2015, "Furiase said.

However, beyond the outcome of the elections and the possible reaction of the markets, Furiase believes that the Central Bank has "ammunition" to cope with the pressure of the currency. In case of activation of these ammunition, they estimate that the dollar can reach 45 pesos in October and will not exceed the ceiling of the exchange band, established at 51 pesos. "The Central Bank has $ 6,600 million of future contracts or the sale of a portion of the $ 20,000 million cash reserve as authorized by the IMF. But that can only help you for a moment, the plant can only moderate the pressure in the short term, "Furiase said.

Alejandro Vanoli, former president of the Central Bank from 2014 to 2015, agreed that the central bank could contain the short-term exchange pressure, but said that the exchange rate uncertainty is not generated by a possible triumph of Alberto Fernández in the elections. STEP "The government wants to install that the benefit of the Front of All is what creates uncertainty. But what creates uncertainty is that Argentina has a very high short-term external debt and does not generate repayment capacity, "Vanoli said. To back up his argument, he referred to the Bloomberg agency's indicator, which states that Argentina is leading the ranking of the most vulnerable emerging countries. And to the statements of the orthodox economist Guillermo Calvo, resident in the United States, who stated that "a government with Cristina could be more credible than that of Macri, who showed no ability to manage the situation ". In this sense, Vanoli said: "Bloomberg's question was pithy, stripped of the problems of the external sector, and that of Calvo shows that there is a current of opinion on Wall Street that believes that it's not the same. a triumph of Alberto Fernández would lead policies reducing external vulnerability. "

For Vanoli, economic uncertainty is not generated by the opposition, but by the weakness of the Argentine economy that has spawned debt and financial deregulation. "Today, we depend on the US Federal Reserve not to raise interest rates. Many global factors affect you the most when you are an economy as indebted as ours, "added Mr. Vanoli. In this context, he said that the Central Bank was free to intervene: "I do not see anything that could disrupt the exchange rate over the next three months." Even in this case, he warned that net reserves would not be enough to "end a significant dollarization that occurs in all election years and worsens as a result of deregulation of the financial market".