2023-11-14 16:48:05
Infobae note
This Tuesday, November 14, marks three months since the 17% devaluation that was applied to the peso in the official market the day after the primary, simultaneous and mandatory open elections (PASO) in August. That Monday of high financial tension, the Government decided to alleviate some of the pressure on the international reserves that the Central Bank suffered daily and, immediately afterwards, freeze the wholesale dollar at $350 for sale. The freeze had an expiration date and that expiration was set for today. And starting tomorrow, official sources confirm, the official dollar could begin to move.
“It’s 3% until the end of the month, 3 pesos tomorrow. It is that simple, it represents 1%,” official sources told Infobae. “From 15 to 30, 3% the crawl. And the first day, 3 pesos,” they reaffirmed.
The date of November 15 arose from conversations with the International Monetary Fund (IMF). The economic policy led by Sergio Massa widely departed from the path set by the organization – the reserve and deficit goals deviated by several kilometers, the monetary goals are only formally respected and the discontent in Washington is no longer hidden – and It is the minimum peace offering that remains for the minister and candidate to try not to break the relationship in the face of what could be, through elections, the beginning of his presidency.
The Secretary of Economic Policy, Gabriel Rubinstein, was in charge of making the date transparent almost a month ago, when the opposition was speculating about a new rise in the official dollar after the general elections in October. “On October 23, the official dollar will be at $350. Everyone has already realized, in the country and abroad, that without a significant amount of dollars to control the financial market, the maxi deva is useless. And since 11/15 crawl at 3% monthly”, he had said on his X account, the social network formerly known as Twitter.
The truth is that the conviction shown by Economy and Central Bank officials a month ago became weaker as the agreed date approached. A crawling peg at 3% per month – that is, letting the dollar rise 3% every 30 days through daily mini-devaluations – does not seem like something that is going to change much on the exchange front. October inflation was 8.3%, just under three times what the wholesale dollar is going to move. But that’s not all, in the three months of freezing there were two consecutive months above 12% advance in the CPI.
To return to the $350 level of the day after the PASO, tomorrow the wholesale dollar should be set at $473 for sale. It is not in the Government’s plans
The delay of the official dollar in that period is astronomical. If the UVA index is taken to calculate how much the currency should have risen in the wholesale exchange market just to accompany the advance in the general price level, we see that inflation accumulated an increase of 35% between August 14 and November 15, day of the end of the freeze. To return to the $350 level of the day after the PASO, tomorrow the wholesale dollar should be set at $473 for sale.
Last week, Massa made it clear that none of that is going to happen. The movement, he assured, will apply the rate of advance of 3% per month prorated to one day.
“There is an agreement established with the Fund that provides that on November 15, before the runoff, the crawl begins,” he said.
“What’s more, I’m going to give you another piece of information, the first day of the crawl is three pesos, for those who speculate with the future dollar,” Massa added in television statements.
The question among officials and economists, then, is why add exchange noise a few days before the runoff if a three-peso increase does nothing to alleviate the dollar’s lag or to ease the pressure on the Central Bank’s reserves. There is not much difference between starting the crawling peg now or, in any case, starting on Monday.
“It is clear that they cannot continue supporting $350. They have to follow the crawling. But crawling at 3% is also useless. The truth is that what happens this week is going to be irrelevant. Everything will depend on what happens after the election. And from there we will begin to see what will happen to the regime,” said Sebastián Menescaldi of EcoGo.
The expectation, from what is filtered from the Economy and the Central Bank, is that of the birth of a transition scheme. It can start this Wednesday, it can start on Monday, but it will not have much impact. There is talk of a slide in the dollar that accompanies inflation, between one and two points less than what the CPI sets each month. But it is nothing more than a scheme until December 10, until the change of Government. Much more determining, then, will be what happens in the elections. And what the winner says in his first speech.
“With this gap and with this type of delayed change it does not work. The importers take the dollars out of your hands and you are left like today, where there are no dollars directly. Furthermore, exporters have no incentive to liquidate you, which is what happens today. You end up making the dollar 70-30. Therefore, what is happening now will only be short-term, it will be transitory. “This is going to be temporary until someone makes decisions on December 10,” Menescaldi concluded.
The start of the new crawling peg season, then, does not promise any immediate earthquake. At least not before Sunday. But its “noise”, because the movement of the dollar that influences, for example, credit card expirations, is going to attract attention at a politically inconvenient time for the Government.
The noise, whether it starts ringing immediately or since Monday, has a meaning. It seeks to provide room for them to answer the phone at the IMF after the elections.
“But there are more than USD 5,000 million in maturities between the IMF itself, international organizations and the interests of the Bonares. And without disbursement from the IMF there is no way to pay them” (Caamaño)
“It has to do with the expirations that exist in December, January and February. The seventh review is in the air, we should have had news on November 10 but nothing happened. There was no Fund mission, nothing. But there are more than USD 5,000 million in maturities between the IMF itself, international organizations and the interests of the Bonares. And without disbursement from the IMF there is nothing to pay for them,” said Gabriel Caamaño Outlier.
“The Government is doing the minimum possible to avoid detonating the relationship with the IMF and this only serves as a gesture in that sense, it is not going to have much more impact,” he concluded.
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