2024-02-16 23:18:09
From the inauguration of Milei, on December 10 to the present, The blue dollar rose just $105 or 8.7%, compared to an inflation of around 50% between mid-December and the first half of Februaryalthough if the price is taken since the runoff (end of November) it advanced +15,3% ($145). In both cases, the parallel exchange rate lagged behind the price increase and the same thing happened with the MEP and the CCLwho climbed 22% ($192) y 27% ($237), respectively.
The dollar haven, is it working?
Since the mid-70s, following the Rodrigazowhich pulverized the savings in pesos and generated a strong transfer of income between debtors and creditors, Argentines carry out most transactions in pesos, but they save in dollars. This was revealed by estimates of the Federal Reserve of the United States, according to which the per capita possession of dollars in Argentina is an average of US$4,400, while in that country the same measurement does not reach US$3,100 per inhabitant.
“The Argentine never stopped dollarizing his savings. Even during the ConvertibilityFor example, in a context of very low inflation for almost ten years, continued to dollarize a high percentage of its savings. This is the product of a change in the cognitive map of Argentines. It changed our heads and our minds,” says the specialist in studies on dollarization and exchange rates, Juan Massot.
“The dollar is like the bunker we have once morest our atomic war, which is inflation. In the face of crises, we Argentines protect ourselves from turbulence with the dollar or real estate. The ‘green’ or bricks and land are Argentina’s refuge assets as if no other existed, not even financial assets in dollars,” he concludes.
He collective imagination He says that in the long term you never lose with the dollar, since even though in a moment of stability the peso is not devalued, if this changes, the greenback does not depreciate. Even another refuge asset, such as “brick”, is also dollarized.
However, This trend would not be respected since the assumption of Javier Milei. Behind the devaluation of 54% of the peso and with the monthly inflation above 20% monthly During the first two months of government, the parallel dollars (blue, MEP and CCL) had a negative variation in real terms.
Why are parallel dollars falling?
The different analysts consulted by Scope stated that the drop in financial exchange rates is due to a complement between a fall in the availability of money, and a strong demand for pesos, due to the high inflation on the part of small savers, who are beginning to sell their dollars to meet expenses, but also for -those who can- pay for their vacations within the country. To this is added the subscription of importers to BOPREALwhich reduces the demand for financial exchange rates.
“The lack of pesos is felt in all market segments, underpinning the negative corrections of all financial dollars, including the blue”said economist Gustavo Quintana.
Likewise, the market seems to have confidence in the Government’s economic plan: “L“The management has shown a real commitment to ending the fiscal deficit, and the market seems to believe it,” he claimed Andrés Reschini, analyst at F2 Financial Solutions.
The statements of the Minister of Economy, Luis Caputo, also generated approval in the market, who announced that In January there was a primary fiscal and financial surplus, and? mercy continues to show that it is willing to pay the political cost of the adjustment, added the economist Amilcar Collante. The analyst also highlighted that “The government is having meetings with foreign banks for the entry of foreign currency.”
Despite this amount of confidence, Reschini emphasized that “there are still high levels of exchange restrictions and there are still many challenges ahead for this management”.
Meanwhile, President Milei revealed that in June of this year he might eliminate the dollar stocks as the previous step to the dollarization: “The estimates of International Monetary Fund (IMF) they say that we can open the stocks in the middle of the year“.
Beyond the financial situation, the economy worsens day following day due to the sharp adjustment in prices and the collapse of real wages. In this sense, the economist from Epyca and the National University of General Sarmiento, Florence Fiorentinexplained to Ámbito that “a drop in the level of activity is also observed: December indicators already show an unfavorable evolution. The industry’s capacity is less utilized than in December 2020when the country was emerging from the pandemic.” While at the end of 2020 it was used at 55.7%, at the end of last year it was only 54.9%.
Blender in its greatest splendor
““The chainsaw and the blender, which are the pillars of the adjustment, are not negotiated”he assured last Wednesday Javier Miley. In its greatest splendor, it is precisely the blending of pesos and the cutting of spending that are dragging the parallel dollar downwards. The economist Elena Alonso He pointed out that the increase in costs generated that “Companies have to liquidate their dollars to cover expenses”which relieves pressure on the exchange rate.
Just as it happens to businessmen, so do small savers began to liquidate your dollars to make ends meet before the drop in purchasing power in the absence of salary adjustments – in a good part of the different economic sectors – that manage to compensate for inflation. Even last Wednesday, it was the President himself who echoed the news and “celebrated” it on social networks.
Milei celebrated that small savers sell dollars to make ends meet.PNG
In this context, The population’s ability to buy dollars also decreased significantly, while sales grew in the marginal market, in search of the necessary pesos to meet the commitments of both families and companies.
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