Why does it not stop rising and what could its ceiling be?

He Dollar blue broke a new record this Monday, June 24, rising another $30 (+2.3%) and entering the unpublished US$1330 for sale, after the holiday Flag Day. Thus, this month it increased by $105 (+8.6%) after several weeks marked discussion of legal framework And tax package, and also a request for acceleration”creeping peg” belonging International Monetary Fund (IMF).

parallel currency is going to record its third monthly growth in a row, despite the government’s regular clarifications about the refusal of devaluation, which the president himself made this Monday Javier Miley ratified. Meanwhile, gap with the officer he is already in 46.4%, maximum 5 months. At all, Does the market trust the government that it is not going to accelerate the creeping peg?

The Overheated Blue Dollar: What’s Causing Its Bullish Performance?

City analysts agree that the seasonal period is from mid-June to early July optimistic about He parallel dollar. This can only be explained by bonus payment.

In this sense, the economist Federico Glustein Ambito emphasized that in some sectors this has already begun to be accepted and, in the middle economic crisis“excess funds that are not used to cover expenses, but are directed to savings,” which creates more demand in this very limited market.

For these reasons, the economist Gustavo Quintana additional factors such as The winter vacation And cost of tourist dollar ($1,483.20), which “stimulates demand in the blue market” from those Argentines who travel to another country. This is because “both foreign spending and dollar card consumption must be paid for by the MVP or blue.”

In its turn, negative real rates They also encourage parallel market because term rate is close to 2.9% nominal and what of Lecap located in 4.25%Before one inflation which is projected between 5% and 6% monthly.

For Martin Mazzadirector of MM Investments, recent rise in blue “This is mainly due to coverage due to the short holiday week and high demand as operations resume.” For the expert there is “relative lag of the dollar price from inflation”, Bye “Negative real interest rates encourage dollarization.”

Record blue dollar: does the market believe the government that it is not going to devalue?

The government insists it will maintain “trailing peg at 2%at least for now reconsider the new agreement with the IMF. “Constant comments about expected exchange delaycompletion dollar mixture (liquidation of 80% on the official market and 20% on the financial market), despite the fact that all this was officially denied. The concern remains and in In a small market like blue, any change in trend affects prices. “There is less supply, but more demand”analyzed Gustavo Quintana.

“While the fixed interest rate – currently at 2% per month – has helped pin down inflation after the significant devaluation, authorities will adjust exchange rate policy over time to move more flexibly to better reflect fundamentals and ensure improved reserve coverage.”– noted agency specialists in the report on the eighth review of the expanded capacity program.

In this context, he also puts pressure on lower foreign exchange payments from the outside field that prevents BCRA from adding the dollars it needs. Among the reasons for not accelerating sales, according to the economist Federico Zirulnikthere is a promise Javier Miley about the possible abolition of deductions in the sector.

In this regard, the weakness of the monetary authorities’ reserves creates anxiety in the market, and at the same time greater pressure on parallel quotes, Glustein added.

In that political sphere, debate Legal basis And tax package in that Senatewhich was finally approved after last-minute negotiations, influenced blue market, so far this week Deputieswhich is the House of Origin, must approve the initiatives or insist on original formulation.

Superheated Blue Dollar: How Much Could It Be Worth?

After rising in recent weeks, Glustein predicted that Dollar blue It could reach $1350 (close to the current price).

Although Quintana was more confident that there would be a decline at some point, with activity returning to normal after a short week.