The value of the dollar accumulates a delay of 65%

The slowdown in the Argentine economy, as a result of the strict social isolation measures imposed by the national government, has changed the agenda of professional interest in managing the economy.

This deviation from the focus of analysis gives the economic authorities an unprecedented amount of degrees of freedom for their decisions, something unimaginable under normal conditions.

The exceptionality in favor of those who decide must work as a warning, since the return to normality will suddenly expose the inconsistencies that are built in the current period.

The value of the dollar in Argentina is a thermometer of the confidence of economic agents.

Projecting its value after the quarantine exit and the obligatory social distancing will be the result of the first data that the market and economic agents can process.

The first thing that will emerge in that reading will be the relationship between pesos and dollars that the Central Bank of the Argentine Republic (BCRA) manages.

This ratio measures the conversion exchange rate, that is, the value that makes the total of issued pesos equivalent to the total dollars that the BCRA has, adjusted by regulations and expectations.

In recent days, said calculation, incorporating a part of the extraordinary issuance of pesos that the BCRA started, shows values ​​that are in the range of 78 to 140 pesos, which includes Leliq and BCRA passes, in addition to the “argendollars” deposited, net of dollar loans from banks.

The statistical median of this range shows 109 pesos per dollar, which indicates that the current price of the currency, around 66 pesos, is 65 percent behind.

At the end of the exceptional period, the economic policy decision-makers will not have all the decision advantages provided by the quarantine exceptional framework and must, at that time, explain which is the monetary and financial model that anchors Argentina to normal.

* The author is an economist