effects after shoot of the dollar bag

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Amid the stillness of the official price, economists diagnose whether the real exchange rate is being affected or not

The uncertainty, combined with the strong monetary issue by the Central Bank rekindles Argentine appetite for the ticket American.

The dollar that is obtained in the Stock Market, either in its Mep version or in liquidation, breaks a record after another as the quarantine is extended. The same happens with blue, which it was traded today at $ 120.

The gap with the officer is between 65% and 83%, according to the price with which it is compared.

Meanwhile, the body that Miguel Pesce conducts validates small daily devaluations at the official exchange rate. Today’s was 9 cents, at $ 66.32 in the wholesale segment. Since the quarantine started, the official dollar increased 4.3%.

Economists recognize that the increase in parallel contributions put pressure at the official exchange rate.

In this regard, Juan Ignacio Paolicchi, EcoGo analyst, said: “Yes, they put pressure on the officer because the incentive of the sectors linked to agriculture is to retain the harvest and wait for the officer to settle or follow the trend of cash with liquidation and to be able to go out to liquidate their exports at a higher exchange rate. In those contexts, where the cash with liquidation and the parallel dollar correct but the official does not, the incentive for exporters is to wait. That pressure, in fact, is seen in the movement, not very abrupt but constant, of the official exchange rate. ”

For his part, Matías Carugati, Seido’s executive director, affirmed: “If the gap remains high or it fires, in some sense it puts pressure on the official dollar to correct it.” The economist pointed out that if this gap is maintained over time, “the problems associated with this will begin to appear de facto splitting“, although he considered that the current situation is different from others.

“Beyond the stocks, the economic situation implies that there should be dollars left in the short term, product of the collapse of imports caused in turn by the fall in economic activity. In more normal contexts, raising the parallel puts pressure on the officer. Perhaps, in the middle of the coronavirus and quarantine, that effect will be mitigated, “he estimated.

Dollar: economists recognize that the increase in parallel prices put pressure on the official exchange rate

The problem with the neighbors

The Multilateral Real Exchange Rate Index (ITCR) indicates how expensive (appreciated) or cheap (depreciated) the Argentine peso is in relation to other currencies. On December 10 this indicator was at 124.15 and today it is at 111.81. This means that the exchange rate appreciated in real terms.

In particular, the decline in the multilateral ITCR became more pronounced since March. That has to do, in part, with the faster devaluation of the currencies with which the peso is compared.

“The parallel dollar is reflecting the monetary issue, the lower interest rates and the devaluations of the rest of the emerging countries, such as Brazil. The response of all countries is to devalue their currencies in order to defend themselves against the appreciation generated by the crisis.“explained Fernando Marull, head of FM&A.

One of Argentina’s trading partners that most devalued is Brazil, so the bilateral ITCR that compares the real against the weight shows a even greater appreciation. At the beginning of March, the relationship between the two currencies was 119.3, while today it is at 98.27.

“In Brazil there was a much more forceful devaluation. Today the real is worth $ 5.3. The real exchange rate appreciated much faster. That leaves a fairly real bilateral exchange rate. more late than bilateral with the United States or with the average of countries, “Paolicchi said.

Carugati, meanwhile, added: “The devaluations of neighboring countries complicate competitiveness of the Argentine exchange rate. In real terms, with Brazil precisely, we lost a little bit of land in the last time because they depreciated more than us. The local officer is pretty calm and we have higher inflation that our neighbors, then, the Argentine real exchange rate is losing ground. ”

Is it possible to speak of exchange rate delay?

Economists consulted by iProfessional agree that the current real exchange rate still is at a high level, beyond the control exerted by the Central on the price and the pressure generated by the jump in parallel dollars.

For Fernando Marull, however, the current value of the currency is already behind. “If it is high because the ITCR is at 111 while 4 or 5 years ago it was at 85, it is still late because the current level includes inflation in recent months, the devaluation in recent months, the devaluation of Brazil and the drop in the GDP of our trading partners, “he said.

The central question in the real exchange rate is how expensive or cheap are the products that the country exports and, in this sense, Marull pointed out: “The withholdings that were established last year made Argentina more expensive because the exporter suffered, almost with the same value of the dollar, inflation, the fall in activity of those who buy it and, on top of that, it has to pay more taxes. For the exporter, this type of exchange is complicated

Exporters' incentive is to withhold the harvest until the official dollar approaches parallels

The incentive for exporters is to retain the harvest until the official dollar approaches parallels

In contrast, Paolicchi and Carugati preferred to focus on the historical comparison of real exchange rate levels. “It is 30% higher than the historical average. In this context, is not late. Now, if they continue to press inflation with a very sudden issuance of pesos to finance the fiscal hole, possibly, after all this situation passes, inflation will accelerate and have impacts on the real exchange rate that can lead to a greater delay, “said Paolicchi.

At the same time, the economist stressed that it is a little difficult to talk about competitiveness at the present time since “they are going to slump imports and exports worldwide “although he acknowledged that Argentina may be less affected because it exports primary products, the demand for which is moderating more slowly.

For his part, Carugati analyzed: “It is true that the Argentine exchange rate appreciated in real terms and that movement is a little more marked in 2020. It has stabilized a little in recent weeks and, even so, we are not far from the average real exchange rate of the last 10 years. So I think there is still a little room for the official exchange rate to continue to appreciate. ”

Regarding parallel prices, Paolicchi indicated that, if the real exchange rate is measured according to the value of the stock market dollar, “the competitiveness is similar to the convertibility output“but warned:”You can’t look at the financial dollar as a measure of competitiveness. Yes indicates a latent dollar demand in society in the face of the collapse of the bond interest rate and the brutal issuance of pesos, which is sometimes directed at individuals who prefer to stock up in dollars and not use them to consume more goods. ”

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