According to analysis circulating in massism, the exchange rate pattern is showing “signs of fatigue.”

A short text that is circulating among economists and leaders of the Renewal Front, led by the former Minister of Economy and former presidential candidate of the ruling Union for the Motherland in 2023: Sergio Massaguarantees that exchange rate policy introduced discount time and that the real exchange rate of the official dollar (that is, adjusted for inflation) is already 4% below the average purchasing power that the official price of the North American currency had between January and November last year, before the start of the current administration.

“The Central Bank of the Argentine Republic (BCRA) ended May with a sell-off in reserves, marking the lowest weekly balance of purchases since the start of Milea’s administration. At the end of this week, she had to intervene in the market, selling US$52 million, thus marking the second selling period of the week,” the text reads, also highlighting the sale of US$11 million at the beginning of the week. Thus, since entering Miley has already been in office for six days of net sales of dollars by the Central Bank.

“During the month, BCRA managed to acquire only US$2.522 million, which is 24.6% less than the previous month. This monthly income is the lowest in the last three months and the second highest during the presidential administration. Javier Miley“February is the only month to record even lower volume,” says the document, one of which has charts that accurately show purchases by month and monthly averages from January to May.

Based on this observation, the paper said: “the exchange rate scheme implemented in December last year to restore BCRA reserves has shown signs of fatigue due to various factors.”

The first thing he lists is that the eradication of the rough crop “has been slower than expected, which has impacted expectations.” Despite the increase in settlements during the May weeks, as the text explains, “they did not reach the predicted level,” and this fact is due to low interest rates.

“Since banks offer loans to villages at a rate of 3% per month or even less and with creeping peg (official dollar appreciation benchmark) BCRA at 2%, producers prefer to preserve harvest, especially in the context of expectations for rising soybean prices in Chicago,” the excerpt explains.

The second factor to which he attributes “signs of fatigue” is positive: “a healthy recovery in import demand.” In this regard, it is noted that 68% of imports were paid for in April, “indicating a slight improvement compared to March 2024 and reaching the highest level since July 2023.”

However, the analysis continues, showing a graph from the economist’s report. Salvador VitelliAccording to consulting firm F2, “about $1,490 million remained unpaid in April, totaling $9,100 million in outstanding debt in the first quarter.”

For this reason, he warns, “it is essential to normalize foreign trade to resolve this situation.”

In its final part, the document takes stock of what has happened since the December devaluation, and the Single and Free Foreign Exchange Market (MULC) access scheme for importers who paid only 41.7% of accumulated imports in the first quarter saved US$7,600 million and allowed BCRA to purchase US$17,274 million.

However, he warns, in the second half of the year, “the situation is expected to be more challenging given the expected recovery in foreign exchange demand for imports and the impact of the lagging exchange rate, which is currently 4% below the January rate.” on average – November 2023.”

This, the analysis concludes, “could impact foreign exchange supply if the government maintains its trailing peg strategy of 2% per month.”