What are the reasons for the rebound and what is the market expecting?
He Dollar blue experienced notable increase of $60 this Monday to the point where it is close to $1,200 after rising another $80 last week. The parallel thus marked its biggest daily gain since early January. This behavior cemented the bullish trend, leading to the illegal dollar. to its highest in three monthsclosing early in the week $1180.
With this strong growth, the gap with the official dollar has widened. to 32.7%, the highest level since February 21 last year..
Blue dollar: reasons for growth and what awaits the market
The strong rebound of the blue dollar was influenced by sixth reduction of the Central Bank rate (BCRA), under the direction of Santiago Bausili. Upon learning that inflation has returned to single digits (8.8%), Last Tuesday, the monetary authority decided to cut the monetary policy rate by 10 percentage points, bringing it to 40%.
Economists and financial analysts thus consulted agreed that This measure had a direct impact on the growth of the blue dollar. because saving pesos and investing them on fixed terms is becoming less and less attractive. In most banks, where profitability was already negative, The rate was adjusted to 30% per annum. which is equivalent to 2.7% per month, which is a far cry from the 5-6% inflation forecast for May.
Economist Elena Alonso said recently the growth of blue is associated with lowering the interest rate, “given that given the yield on fixed terms, people feel safer hedging themselves in dollars.”It should be remembered that some term rates are already below 30%, and investors are switching to saving in dollars.
Alonso notes that, in addition, they started talking more about dollarization, which creates defensiveness, fear and uncertaintywhich causes people to seek refuge in the dollar, which “has always made us feel safe.”
“This uncertainty tells us that by June we could see growth, but also relative stability,” he said. the economist assured this publication Federico Glusteinand predicted a “slightly bullish position” for the next few days, “but not a jump, since the difference with MEP is almost 10%, and with SSL 7%. Could do trade a few days and then decline, waiting for the next Treasury tender and placing a higher bid instrument such as Lecap.”
Meanwhile, the financial analyst Christian Butlernoted that May could be the first month of management Javier Miley in which the dollar exceeds inflation and the exchange rate. Although he classified it as “partial recovery”since in previous months it increased by 15%, and inflation was approximately 70% (65% January-April + 5% estimate in May).
Regarding the political sphere, as explained Alejandro Bianchifounder of AsesorDeInversiones.com, also supported Dollar blue the probability that Legal basis don’t go for celebrities May Pact and that it could be moved to June or July, according to the president Javier Mileywhich gave birth “some kind of fear in the market”.
blue dollar 2024.webp
Regarding possible delay in exchange, Alonso pointed out that inflation in dollar terms was very high due to peso inflation that occurred in the first months of the year and in December. “This may create a feeling of a cheap dollar compared to this situation, but I do not see the government being able to increase the devaluation, especially against the backdrop of falling inflation,” he stressed.
In this context, Alonso believes that the reallocation of costs and sales prices remains in the hands of companies so that they strive to be more competitive. He also said the government should step in by cutting taxes to help them, but he doesn’t believe that will happen by adjusting the exchange rate.
Regarding the exchange rate and level of the dollar, Leo Anzalone, director of the Center for Political and Economic Studies (CEPEC) noted that this is at least a by-product that is good for the government. The problem is not the official dollar, which he believes will continue to creep at 2% per month, nor the color blue. “This is where you want to pay attention to financiers because they are the least confident.”
“So, every time the rate falls, there are changes that CCL needs to watch. Why is this a beneficial by-product? Because every time there is a decrease, the CCL goes up a little bit, and that’s what the village is looking at, because there’s 20% liquidated, if the village is liquidated, then the government gets dollars.” noted the economist.