In February, the Central Bank chose to uphold the 2% monthly crawling peg policy, contrary to market expectations. This decision was made in response to the spike in the exchange rate in December. The recent inflationary surge has started to dilute the advantages of the devaluation. Experts in the City caution that the real exchange rate has returned to its pre-PASO 2019 levels.
Following the PASO, the Mauricio Macri administration had to approve a sharp increase in the exchange rate and later restore the stocks. Therefore, the comparison with that period raises concerns about the risk that the Bausili-Caputo duo may have to follow the same steps sooner rather than later.
Back then, the financial indicators seemed more stable: the inflation rate was 2% per month, the Central Bank had a significant stock of net reserves, the country’s risk was around 800 points, and commodity prices were favorable. However, the political shift necessitated the jump in the exchange rate to avoid the peso’s competitiveness loss.
Analysts at Gold Values cautioned that it seems rather reckless to continue with the strategy of a very low crawl, which will create a growing risk of new imbalances. Particularly, the impact of the August 2019 devaluation on retail and wholesale inflation is quite different from the sudden impact of the price adjustment following the December devaluation by Caputo.
The Minister of Economy Luis Caputo has repeatedly stated in his recent public speeches that the exchange rate will remain high in real terms; hence, there is no need to expedite a new devaluation. The drop in financial dollars provides the government with breathing space to continue down this path, which could lead to exchange rate unification in the latter part of the year.
Consultants at Invecq noted that even the IMF itself is not supportive of this argument. In their last review, they surmised that the real exchange rate left by the previous administration was lagging 35%/40% behind the macroeconomic fundamentals. This implies an exchange rate of between $870 and $900 today, suggesting that the official exchange rate is already falling behind.
Although the futures market has subdued expectations of an exchange rate jump in the second quarter, investors are predicting an official dollar rate of $1,024 in May. This would represent a 21% increase from the $840 recorded at the close of this year on Tuesday.
Nery Persichini from GMA Capital explained that the projected advances embedded in the futures dollar rate indicate that the 2% monthly crawl might be short-lived. “Assuming REM inflation and a 2% monthly exchange rate growth, the wholesale price of $839 would drop, at today’s prices, to $500 by July,” he added.
In the meantime, the unusual strength of the peso has been beneficial to investors who bet on the carry trade. Despite the strongly negative inflation rates, investors betting on the peso made profits in hard currency.
Persichini pointed out that thanks to this remarkable short-term appreciation, peso investments enjoyed the best start of a presidential administration so far in the 21st century. “Since December 10, the carry trade with BADLAR accumulated 12% in dollars, a record which is three times that of the start of the Cambiemos administration for this time of year,” he highlighted.
https://votejasirobinson.com/unlocking-the-potential-the-evolution-of-toto-sites-in-online-gaming/
https://theeyewitnessreports.com/decoding-the-mystery-understanding-toto-sites-inside-out/
https://phantomcityrecords.net/toto-sites-unveiled-the-ultimate-handbook-for-players/
https://wallpaperpc.net/innovative-insights-the-future-of-toto-sites-revealed/
https://chaffinchshoelace.com/the-power-of-choice-finding-your-ideal-toto-site-experience/
https://museandthecatalyst.com/redefining-online-entertainment-toto-sites-in-focus/
https://dreamcastgallery.com/the-ultimate-toto-site-encyclopedia-everything-you-need-to-know/
https://degenhardtforassembly.com/toto-site-tactics-maximizing-winnings-and-minimizing-risks/
https://sarcia.net/the-art-of-toto-site-selection-crafting-your-path-to-success/
https://sabrinaheisey.com/toto-sites-exposed-exploring-the-depths-of-online-gaming/
https://savetitlex.org/beyond-gambling-the-multifaceted-world-of-toto-sites/
https://nextgenmag.org/the-rise-of-toto-sites-a-phenomenon-in-modern-entertainment/
https://volvo-tommy.com/toto-site-mastery-strategies-for-thriving-in-the-digital-arena/
https://rus-img.com/from-novice-to-pro-a-journey-through-the-toto-site-universe/
https://bestlittleregion.net/breaking-barriers-exploring-diversity-in-toto-site-offerings/
https://anaheimpoliceassociation.org/the-toto-site-chronicles-stories-from-the-frontlines-of-online-gaming/
https://agricolandianews.com/democratizing-entertainment-the-accessibility-of-toto-sites/
https://forecos.net/unlocking-the-vault-strategies-for-winning-big-on-toto-sites/
https://grandhotelflemingrome.com/behind-the-screen-the-technology-powering-toto-site-innovation/
https://nirvanainstudio.com/toto-sites-transformed-adapting-to-changing-player-needs/
https://whofast.net/exploring-the-unknown-the-thrill-of-toto-site-adventure/
https://schneppzone.com/the-psychology-of-toto-sites-understanding-player-behavior/
https://uitstartup.org/mastering-the-game-strategies-for-domination-in-toto-sites/
https://defyinginequality.com/toto-sites-in-the-digital-age-navigating-a-dynamic-landscape/
https://handgunradio.com/the-evolution-of-risk-a-historical-perspective-on-toto-sites/
https://portalciencia.org/charting-new-territories-the-global-expansion-of-toto-sites/
https://asecuritynotice.com/from-concept-to-reality-the-birth-of-toto-site-phenomenon/
https://supplementq.org/toto-sites-a-gateway-to-thrills-excitement-and-rewards/
https://virtualegion.com/the-anatomy-of-toto-sites-deconstructing-the-gaming-experience/
https://conwayforatx.com/unveiling-the-secrets-insider-perspectives-on-toto-sites/