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what will happen to the prices, according to experts

The stability is shown in the MEP dollar – also called the Bolsa dollar – Counting and liquidation and there blue since the end of January – when the principle in accordance with the IMF– evaporated last week with all three parallel currencies breaking the $ 200 barrier. The blue dollar closed on Friday, April 22 at $ 203, with which it rose $ 8 during the week, the highest increase since January, and the differences with the official wholesaler increased to 77.7%. While, The CCL and the MEP being traded on the stock market recorded weekly increases of 9.6 and 8.9%, respectively, at the end. above $ 208. In these cases, there difference and the official wholesaler it exceeds 80% again.

The free dollar rebound came after he knew that inflation March was 6.7% and after the announcement of the Minister of Economy Martin Guzman in granting obligations to boost incomes in the most vulnerable sectors, and to promote a tax unexpected returns for companies with net profits greater than $ 1,000 million.

The announcement of the new ‘platitude plan’ has caused a stir in the market, which has questioned the achievement of the goal of the IMF.

Dollar Rise: What Caused It?

Among the reasons for the rise in prices in parallel dollars, some analysts accuse this new “silver plan” it could mean greater issuance and raise doubts about the deficit target achieved with the IMF because it implies a cost of $ 200,000 million (0.3% of GDP), which causes “noise” in the market.

They also assert that in the face of accelerating inflation in March and private estimates that the cost of living in April will exceed 5%, “it was expected” that at some point the dollars would wake up and start moving more in line. and inflation ..

In addition, everyone agrees that the rise in alternative dollars and the Central Bank’s difficulties in accumulating reserves in April will be linked. despite the fact that the high reserve season has already entered due to the liquidation of the thick crop.

Dealing with this combo, the market says that foreign currency has taken advantage of the calm exchange rate, the increase in the rate of pesos, and the attractive profitability of Title CER who adjusts for inflation does “bring trade“, disarmed positions in recent days. This also encouraged the rise of financial dollars.

Difficulty accumulating reserves

The agreement with the IMF envisages a goal of accumulating net reserves for this year in $ 5.8 billion. The first quarter goal was achieved in an adjusted manner and thanks to the first disbursement of the program to the IMF in late March. In this regard, the small amount of dollars that BCRA will buy in April is worrying.

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Sebastian Menescaldidirector of Eco Go, attributed the rally to the financial dollar “The government finds it very difficult to meet the reserve target, it has to buy 2.9 billion US dollars in the second quarter and does not achieve much.” despite the liquidation of agriculture.

This Friday, April 22, the monetary institution bought 15 million US dollars in the official foreign exchange market (MULC), which ended the week with a positive balance of 152.9 million US dollars, and in the month it accumulated net purchases for 165.3 million US dollars, according to official sources.

BCRA failed to buy many dollars in April to inflate reserves despite revenue from the settlement of the crop.

BCRA failed to buy many dollars in April to inflate reserves despite revenue from the settlement of the crop.

Menescaldi compared that figure to much lower in relation to the “$ 1.667 million” that was accumulated at that time in the month of 2021.

At the same time Emiliano Anselmi, leader of the PPI macroeconomic team, specified that so far this year BCRA accumulated a balance of purchases of “147 million US dollars against 3.597 million US dollars in the same number of wheels” in 2021.

In this context, Alejandro GiacoiaAn economist at EconViews stated that “Doubts about meeting the targets with the IMF generate noise in the market, the first quarter supply guide was met thanks to the contribution of SDR from the Fund and the fiscal deficit thanks to a Accounting trick “, and warned that” for the coming quarters the situation is more complicated and the market sees it, “emphasizes the economist.

In tune, a report from the consultation FMyA points out that agribusiness is liquidating, the dollar is no longer falling behind (the creeping peg is accelerating), but demand remains firm, so. The BCRA does not buy spares“And in May-June, agriculture will continue to be liquidated, but the BCRA still needs to buy US $ 2.6 billion, at a rate that is not enough.”

Will the dollars rise due to disarmament to bring the trade?

Given the scenario of uncertainty, a disarmament of the bear trade has been evident in recent days. For Ferdinand BaerChief Economist at Quantum Finance, “the recent rise in financial dollars has to do with higher demand money from abroad which is still blocked, made bring these months and take advantage of the low level of disarmament and dollarization “.

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“There’s money from abroad dismantling the pesos bond position. That could be the catalyst. While the CCL is quiet, nobody goes shopping because the opportunity price is high, but it’s enough that it starts moving for some reason so that everyone go to hedge and the movement worsens “, commented a broker in the iProfesional market.

Investors set aside trading to carry them and sought protection in the dollar.

Investors set aside trading to carry them and sought protection in the dollar.

Lucas YatcheChief Strategy Officer of Hare Capital also said “there have been profits by those who have brought in the last four months, which have accumulated a very significant return, The market for small financial dollars and with some important players involved with its significant volume can generate this kind of movement ”.

In turn, a report PPI “On Monday, April 18, the coupons were issued BOAT 23 and 26 (Treasury bonds) and the maturity Leisure (X18A2), looking in detail at the holding via Bloomberg, we detected that a large real money fund had a share in these instruments. “And they added:” If we add to this, at the first auction of April, in the absence of short options CER, the roll was well below previous months, we can suggest part of these pesos were press the CCL during the week.

In the PPI they analyze that “in such a walk, and Given the terrible fiscal signs and the accumulation of reserves are very poor these days, this one event could be extended further “. Nan FMyA They also mentioned that “a great background (Templeton) CCL Justice. “

That way, Javier Casabal, an analyst at Adcap Grupo Financiero, said that in early March it was recommended to carry out a bear trade because “we expected a strong accumulation of reserves, as happened last year, but that clearly did not happen. ” For this reason, Casabal commented “We think it is a good time to take profit after a significant performance in inflation-linked peso liabilities.”

According to some analysts, BCRA could tighten access to dollars to importers in order to accumulate reserves.

According to some analysts, BCRA could tighten access to dollars to importers in order to accumulate reserves.

Is a tightening of the trap coming?

For the failure to buy spare parts, he adds that importeds in March grew 33% year-on-year, reaching US $ 7.074 billion “the highest value observed since August 2013” ​​indicated consulting company LCG, and noted that in the first quarter they increased 40% year-on-year “14 percentage points higher than export growth”.

Yache explains that “One of the reasons the BCRA has a hard time accumulating reserves is that interest rate is running under the pace of devaluation in the official dollar and discouraging exporters from liquidating and encouraging importers to advance their payments “. And it is limited: “In addition, BCRA released a certain request by importers.”

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Against this background, in FMyA It was estimated that the solution could “tighten the trap again, unless Argentina receives $ 1.4 billion from the IMF in global aid that the international organization is evaluating.” For the consultant “Higher costs due to the new silver plan and the possibility that the BCRA will have to tighten stocks to buy reserves could be behind this week’s increase in the CCL.”

in the same appearance, MenescaldI insist that “all the dollars will be taken by the real economy because the other payments were not important, the imports will fly”. And he estimated that “they will have to recalibrate the dollars given to importers, stocks will be tightened in a way to be able to accumulate reserves, and most likely it will be this season,” he estimated.

For Jorge VinasToronto Trust portfolio manager, “in recent months they have taken advantage of the IMF ‘s extraordinary inflow to relax imports and thus fuel economic activity, but. to the extent that reserves cannot be accumulated, it is possible that they will be restricted again “.

Instead, Anselmi He said: more seasons, and where to buy again “.

The market believes that if the BCRA does not accumulate more reserves, financial dollars will continue to rise

The market believes that if the BCRA does not accumulate more reserves, financial dollars will continue to rise

Will financial dollars continue to rise?

For vineyardTo the extent that a seasonal purchase of reserves does not take place, the upward pressure on financial exchange rates may intensify.

Baer agreed that “pressure will be generated to the extent that the problems continue: difficulties in accumulating reserves and progress in the program with the IMF.”

Casabal considering that “in these circumstances, we cannot be too surprised if the difference returns to the level of 85% or 90%”.

For Giacoia, “wage increases have begun to be negotiated and to the extent that revenues are reconstituted, there may be more demand for foreign currency to cover against the acceleration of inflation. This may also have had an influence on prices.”

Analysts are at Invest in the stock market They stated: “You see a sensitive market and political updates, which will lead to the current CCL bounce. As businesses sell their crops and opportunity prices do not bring trades down, we believe that The CCL continues to gain strength as he saw last year.

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