Why is the blue dollar remaining calm and what factors could disrupt it?

the dollar blue ended this week at $ 142, well below the all-time high of $ 195 it set in October and well below the official dollar ($ 160) and cash with cash ($ 148), despite being above the stock dollar or MEP ($ 139).

The official is worth $ 97 on the pages of the banks, but to that must be added a surcharge of 30% for the Tax PAIS and 35% as prepayment of profits, leaving the final price at $ 160.

The calm of the exchange rate, according to several analysts, came because the ground is liquidating foreign currencies due to the good prices recorded by commodities internationally and because the Central Bank is intervening to prevent the spread. exchange rate to widen.

For some specialists, even the payment of the wealth tax, which expires at the end of the month, would affect the foreign exchange market because those who have to pay the tribute, which reaches assets of more than $ 200 million, need to get pesos.

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Risk factors

Analysts argue that, despite the current calm in exchange rates, we must consider that there is a context of low reserves, that we are going through an election year, and that we are coming out of a very difficult 2020 economically.

The main risk threatening the stability of the dollar is the low level of central bank reserves, which stands at around US $ 5 billion. Added to this are the probable uncertainties over monetary policy due to the measures the government might take or to the maturity of the debt as the Paris Club and the IMF approach.

The first payment the government will face to international organizations will be in May, when some $ 2.4 billion is due to be paid to the Paris Club, and the other towards the end of the year for about $ 4.8 billion. of dollars. the IMF.

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Another risk factor against exchange rate stability is the trade balance. After a year of global restrictions due to the coronavirus pandemic, growth could return in 2021 but there should be a good harvest and the field should not hold it back. But in addition, the reactivation of international trade would lead to an increase in imports and this would put pressure on the demand for dollars.

On the other hand, a very important factor regarding the forex market is that legislative elections will take place in October and the market will carefully consider whether Kirchnism is increasing its strength or not and what internal numbers will prevail in Together for Change.

-> Dollar as an investment

Over the past year, the dollar has beaten inflation as an investment (which rose 40%) by accumulating a 70% rise, from $ 84 for the March 25 sale to $ 142 this week. . Cash with settlement went from $ 88 to $ 148, and the European dollar from $ 88 to $ 139.

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This surge in the dollar was helped by the fact that the pesos did not perform well enough, as the fixed terms barely matched inflation. For example, a fixed term of up to $ 100,000 offered a nominal annual rate (APR) of 27.3% at the end of March, or an annual effective rate (AER) of 31%. Between October and December, at the initiative of the Central Bank, the TEA of these instruments rose to 44%, but this barely matches inflation and is also 30 points below the rising dollar.

To avoid being exposed to negative real rates, an alternative to hedge is the fixed-term UVA, which offers a rate of 1% per year above the change in the CER index (inflation) but requires a immobilization of funds for at least three months. .

Whoever bet on the dollar last year also beat those who stuck in sovereign bonds, as the prices of these assets were linked to bad budget accounts and inflation. So the swap’s dollar issues have accumulated a 28% drop since September, and peso bonds, while battling inflation, have not beaten the dollar.

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-> 35% refund

On the other hand, Wednesday is the deadline for requesting a refund of 35% withholding tax on income for the purchase of dollar savings and foreign currency expenses, such as subscriptions to services such as Netflix, Spotify, Apple, Amazon, Disney + and Google Drive, among others. The steps to request a refund vary depending on the tax status regarding income and personal assets.

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For employees and retirees who only pay income, the first step is to access the AFIP page with a tax code, click on the “Siradig Trabajador” service, then go to “Add deductions / collections / payments to account ”and“ Payment on Account – General resolution (AFIP) 4815/2020 ”on form F572 Web. There, the collections of 35% must be reported between September 16 and March 31 next. For those paying both profits and personal assets, reimbursement will be made upon filing of the affidavit at the end of June.

And for those who pay neither profits nor gross income, AFIP has activated the “AFIP Income Reimbursement” service to process the request. In this case, you must enter with CUIT and the tax code level 2 or higher; inform the CBU where the funds will be credited in the “CBU Statement”; then manually add the missing earnings in the “Refund of AFIP earnings” service.