Even with the agreement with the International Monetary Fund for Argentina to refinance the US$44,000 it owes to the body approved by the Senate the relative calm of the foreign exchange market seems to have been put to the test. In the sky of the incipient financial summer, the clouds of “uncontrolled” inflation threaten the peace that had been achieved in recent weeks.
The parallel dollars, that is to say the blue and the prices that are obtained in the stock market, were in clear decline until last Tuesday the INDEC released the CPI for February. The blue went from trading at $199 that same Tuesday to closing the week at $202.5. A similar reaction was seen in cash with liquidation and the MEP dollar. that still very far from the highs of the end of January, ended on Friday on the rise.
The price of cash with liqui added about seven pesos or 3.8%, to $195.47 through the Global 30 (GD30C), as well as the MEP, which closed agreed at $196.40
The market remained expectant for the “war against inflation” announced by President Alberto Fernández himself and what they believed to be imminent, a rise in rates by the Central Bank. But Fernández’s announcements did not arrive and the body chaired by Miguel Pesce preferred silence and postponed its weekly board meeting for this Wednesday.
In this way the mistrust of savers and investors in the face of “overheated inflation” is not only based on the delay in the official reaction, but also on the lack of anchors with which the Government has within the economic program that has just been agreed with the Fund to prevent prices from continuing to skyrocket.
“Today, no remuneration metric for pesos is enough to compensate for the erosion of purchasing power expected in the short term,” said Nery Persichini of GMA Capital. In this line, Delphos analysts pointed out: “We do not expect these “heterodox” measures to be effective in combating inflation in the absence of an anti-inflationary plan to replace the anchors that the government used in 2021″.
The Government promised to “sincere” the prices of energy tariffs and at the same time to “let the wholesale exchange rate run closer to the prices of the economy.” While the projection of the last Market Expectations Report (REM) was that retail inflation would reach 55% this year, some consultants raised that forecast closer to 60%.
Last week, the Central Bank accelerated the daily rise in the exchange rate and the wholesaler raised eighty-two cents the highest correction in more than a year. Thus, the Central increased its rate of devaluation to 49% per year, still behind the rise in the rest of the prices in the economy.
“To the increase in international prices has been added an acceleration in the rate of crawling peg, which in recent weeks has approached 3% per month. Therefore, the upward pressure on the price of all imported products and that define their value based on the opportunity cost of exports”, explained the administrators of the Common Investment Funds Mega Inver and Quinquela.
The Central Bank must manage the rate of daily depreciation to prevent the peso from continuing to lose competitiveness, but at the same time prevent a more sustained jump in the official dollar from affecting the “tense exchange rate calm” scenario and moving back into prices.
In this regard, the FCI managers stated: “In the last month it lost two points and although international inflation and the fluctuation of other currencies helped to contain this effect in February, in March it would be difficult to avoid.”
The postponed decision on a new rise in the economy’s reference rates will also be key in the foreign exchange strategy. “To the extent that they increase the rate, they will be able to accelerate the rate of depreciation without generating negative incentives for the liquidation of currencies,” the analysts said.