The record prices for alternative dollars to the “stocks” were the thermometer of uncertainty regarding the economy that is spreading among the actors of the financial market. can now talk regarding free dollars in the area of 300 pesos and an exchange rate gap of 130%which shows the expectations of devaluation in the face of accelerating inflation and the confusion over the economic policy signals.
Demand for hedge dollars was intense all week. The free dollar closed at $293 for sale, following touching a $295 nominal record on Friday. The bill climbed 20 pesos or 7.3 percent. In the same vein, the stock market “counted with liquidation” ended above $301 for the first time, with a rise of 0.2% in the weekly balance.
“Los inflation data in Argentina does not look good and at the rate that it has been broadcasting, it has been broadcasting a great deal, therefore it is being given to a combination of excessive monetary issue and at the same time an abrupt reduction in the demand for moneyto the point that this is being seen everywhere: the Argentinian is getting rid of those pesos and stocking once morest anything once morest any real good and not just the dollar. Technically it means that the demand for money decreases and that is very dangerous, because it increases the speed of circulation”, he described. German FermoHead of Strategy of the IEB Group (Invest in the Stock Market).
The rebound in demand for the free dollar was to be expected following the AFIP reported Wednesday night increased perception on account of Income Tax and Personal Assets for operations intended for the consumption of dollars for travel and expenses abroadwhose aliquot went from 35 to 45 percent.
The exchange rate gap of 130% is the highest behind that of October 2020 (150%), and that of April and March 1989, when hyperinflation broke out
“You have to understand that today the macroeconomy is in such a delicate situation. The macroeconomic imbalance is such that all the economic policy options that the Government has ahead of it are difficult, between bad or very bad alternatives. Basically because we have an economy, a macro economy that has a dollar restriction, there is a lack of dollars in the Central Bank and that generates pressure on the exchange rate and on inflation. And because there is a financial restriction, that is, there is an absence of financing precisely to be able to finance the fiscal deficit that we have,” he explained. Federico Furiasedirector of Anker Latin America.
In addition, the BCRA decided on Thursday to use for the design of the monetary and financial policy an interest rate broker made up of the rate of short-term Treasury Bills, 28-day Liquidity Bills (Leliq) and 1-day passes. In this new corridor it will be established that the BCRA’s repo rate works as the lower limit and the bill rate is the upper limit.
The rise in the free dollar in 2022 is 41%, a rate that begins to take advantage of the very high inflation
According to the entity, this decision is part of a strategy that simultaneously meets three objectives: arrive at a positive interest rates in real terms, strengthen the debt market in pesos to achieve depth and liquidity, and gradually advance in the use of Treasury instruments as monetary policy instruments.
“It seems that it was not a good idea change in interest rate policy. Delaying the rate hike while maintaining negative real levels in this context does not seem logical. The liquid cash once morest GD30, above $300; and the value of the dollar that some ADRs mark is already at $307 and rising”, he observed. Manuel Oyhamburu, director of the Buenos Aires Stock Exchange Foundation. “The dynamic that this is taking is really worrying for inflation. This reflects disregard for weight. Any value is validated as long as it is not kept in pesos. The interest rate hike is necessary,” he added.
The Central Bank registered marginal purchases which allowed closing the week without having made any sales, despite the strong demand for foreign currency from imports of liquefied natural gas and fuels.
“The BCRA closed the week with a purchase of a balance of USD 4 million and exceeded the USD 90 million accumulated in the last five days. In the result of the week there was also a Foreign exchange demand for energy imports greater than USD 600 million”, he indicated to Infobae a market source. “Year to date, energy imports are 40% higher than all of 2021″, he added.
Bonds in dollars do not find a “floor”
Los dollar bonds from sovereign restructuring fell 5% in the weekly average, to renewed minimum levels due to the growing doubts regarding the future of the domestic economy that lead to unwinding of positions in search of coverage in dollars, which causes greater pressure on the foreign exchange market.
“Domestic assets have a hard time inserting even a rebound within the dynamic of weakness -despite the punished prices- since they continue to face an unfavorable technical position and a climate of investor mistrust”, he said. Gustavo Bereconomist of the Ber Study.
The risk country Argentine also shot for close to 2,800 points for the first time since May 2020, before the swap. The JP Morgan indicator touched 2,774 points this Friday.
the leading index S&P Merval of the Buenos Aires Stock Exchange improved an important 3.7% on Friday, to 104,222 points at the close, with which cut to 1.5% the drop in pesos accumulated in the week. In any case, the Merval in dollars “counted with liquid” implicit in the prices of the ADRs on Wall Street fell by 1.7% weekly, to accumulate a fall of 16% in 2022.
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