Wall Street Guru’s Stark Warning on Dollar Future in Argentina: ‘Devaluation Is Inevitable and Inevitable’

Chief economist of the company International Institute of Finance (IIF)an organization that unites the world’s major financial organizations, Robin Brooksexpected this Monday that weight Argentina will suffer “inevitable and inevitable devaluation” due to the process of appreciation in the first months of the government’s rule Javier Miley. The warning is consistent with questions about the official program raised by some economists critical of the official model.

On the contrary, the government claims that dollar The downward trend will continue and the local currency will become increasingly stronger. Parallel exchange rates remain at their lowest levels in five months.

“In real terms, the Argentine peso is the strongest currency in the post-pandemic world, while its neighbor the Brazilian real is one of the weakest. This divergence is unsustainable. and obviously this should end with another major devaluation of the Argentine peso,” Brooks wrote on his official X account.

The former head of strategy at Goldman Sachs noted that “the competitiveness gains resulting from the December devaluation were completely undermined by high inflation and the decision to immediately re-peg the peso to the dollar.” The only way to solve this problem is to devalue. It’s something inevitable and unavoidable.”

Many local economists warn of Argentina’s exchange rate delays Central Bank which keeps its reserves in negative territory. This is the case of the director of Eco Go, Marina Dal Poggettowho assured that the government lacks US$20 billion to maintain the current exchange rate scheme unchanged.

As proposed by Brooks, the agency’s Coin Gain Index Bloomberg located in Argentina in first place in the global competitive ranking among 148 currenciesregistering a real appreciation of the dollar by 25%. In second place was the Turkish lira (+7.75%) and the Mexican peso (+3.1%). The most devalued were the Japanese yen (-9.22%), the Swiss franc (-7.57%) and the Thai baht (-6.87%).

Anyway, the latest research Bloomberg showed that international banks expect a 60% jump in the price of the official dollar between October and June next year, contrary to official forecasts. According to these forecasts, the average rate will be $1040 by the end of the year (+7% from the current $972) and $1304.15 for the second quarter of 2025 (+34.17%).

Various quotes from parallel dollar They deepened their downward trend this week, trailing the official rate at their lowest levels in five months. Price free dollar Today it fell $10 and broke the $1,200 mark, a psychological barrier it has not crossed since late May last year, similar to what happened to the so-called MEP or stock market.

Analysts believe that the trend of different prices is due to the consolidation of the financial balance sheet, the receipt of dollars from money laundering and the shortage of pesos in the middle of the tax period.

“Eight months of budget surpluses, capitalization of the BCRA, improved tax collections and money laundering continue to be the main reasons why the dollar is falling and will continue to fall. To this must be added the possibility of financing through repo operations in the amount of US$4 billion. All this could leave us with reserves and dollar deposits of about US$35 billion in a short period of time. The lower boundary of the dollar is approaching the $1,050/$1,100 area,” economics and business consultant Salvador Di Stefano assured Infobae.