Why markets expect more pressure

A battery of measures announced this Thursday, in particular facilitating the liquidation of the currencies of foreign tourists. blue dollar and financial is “completely insufficient” to defuse tensions in the foreign exchange market, According to the judgment of market analysts.

In addition, the BCRA on Thursday issued access to the foreign exchange market for payments for imports of production inputs that had left the port of origin before June 27, and limited assets. Cedar For companies with access to the official forex market.

However, following the known afternoon announcements, blue continued to climb and closed at a record high of $337, posting a daily jump of $20 and rising to $99 in July, while the he gap with the official wholesale dollar widened to 159.3%. , the highest level in 40 years.

In a frenetic day, even financial dollars burned. counted with liquidation peaked at $340, although it eventually closed at record lows $334.16 while the dollar European deputy ended in $322.49

In this regard, a broker said that on behalf of the government “they went to sell bonds to lose the dollar”.

For their part, economists believe that “It is insignificant” the amount that the dollar can bring to foreign tourism to strengthen the reservesAs of Central Bank of QuebecSo far this week, it has accumulated a net sales balance of $380 million on the Official Foreign Exchange (MULC) market and added a red of $980 million during the year.

In the city, they warn that “it’s a bullfight“, they say that the mistrust that exists is due to the fiscal and monetary fallout, which is why They don’t believe the pressure on the alt dollar will stop until concrete accommodative measures with political backing are in place.

Limited to CEDEARs: what will be the impact

On Thursday afternoon, the BCRA added another measure: Decision to integrate the mandate of CEDEAR –Argentina Certificate of deposit– Within the availability range of 100,000 USD that companies that have access to the official forex market may have.

It has also been established to include devices that They cannot be traded for 90 days before or 90 days after official market access.

Seeders are financial assets with local operations, representing shares of companies listed abroad, traded in both pesos and dollars, and are vehicles through which savers and companies can convert their portfolios (adjusted by the dollar CCL) in dollars. utilize.

on the effect of the remedy, in gold price he predicted “This could lead to a greater degree of uncertainty and a panic exchange for the day this Friday”

Tomas Ruiz Palacios The Consultio Plus analyst commented that “this thing about CEDEARs This will not solve any other dollar demand issues.But on the contrary, it shows a very bad sign that they are not able to control the situation”

“I don’t see anything good in it, either they have trouble estimating the extent of the crisis, or they don’t know how to deal with it, because they are attacking the structural problem more than all the measures taken. are,” he shouted.

Emiliano Anselmi, The PPI analyst agreed that “it’s a bad decision”.

“We will have to wait for the reading of the circular. The idea will be to force companies to sell CEDEARs, which Will temporarily dismantle the CCLBut what will companies do with these pesos? Look for dollarization where they can, e.g. blue, Because the extra weight is still there,” he explained.

For its part, Sebastien Menescaldialso said that “we have to see first how the regulations are going to be implemented, but what is the reason that companies cannot pour their surplus into CEDEARs and try to make money, which would mean that the demand for these will drop sharply. Titles which progressed strongly”.

“If they have to get rid of all the securities they own, they will crash the financial exchange rate,” he speculated.

At a time, Juan Pablo Albornoz, Ecolatina, the Economist, criticized that “it shows a total incontinence between the National Securities Commission (which approved 16 new CEDEARs less than 2 weeks ago) and the BCRA”.

“It will probably bring More uncertainty in pricing strategies and greater pressure on exchange rates”Prediction

Tourism Dollar: Homeopathic Remedy

Paul Repetto, The head of research at Aurum Valores estimated that “the effect of the measure on tourism is Insignificant in terms of foreign exchange earnings that can be obtained, perhaps around 80 or 100 million US dollars per month In an optimistic hypothesis, but as an indication of the critical situation in which BCRA reserves itself, this is of great importance”.

In the same reading, Menescaldi said that “with a financial market that is on fire”. The remedies they offer are homeopathic and Those who have nothing to do with the disease should make strong announcements to end this crisis of confidence and another with political support.”

For Ruiz Palacios, “the measures are quite modest, they do not affect any central problem, and they do not even come close to the fundamental change that the market is asking for, which is why the response of the financial dollar has followed. ”

The expert pointed out that the “problem is deeper” and pointed out that this is evident in the June budget deficit data released on Wednesday “which was quite bad” and that “trading with a negative balance for the first time since October 2020″. balance”. ,

,The market is entering a state of panic and these modest measures are far from reversing the trend“He did justice.

For his part, the economist Federico Glustein He recalled that “while he promoted the creation of accounts for tourists to contribute to MEPs, not a single one was opened, anything that required bureaucracy, the person entering the country did not use it. , and that is what this remedy shows”.

“The liquid reserves are nil, there are not enough dollars coming from foreign trade, the trade balance is already in deficit. This measure today The fire must be extinguished with a can of water.he asked.

At a time, Santiago Lopez AlfaroThe president of Patent Values ​​pointed out that “it is a measure that even can spoil the price of blue Because there was a big offer in this market because a lot of tourists go there in informal dollars”.

granted, Jorge VinassoThe Toronto Trust’s portfolio manager said “it’s a very limited move, I doubt it’s enough to allay expectations, but This could be a preliminary step towards broader and more formal disclosure.,

Parallel dollar: will growth stop?

Anselmi argued that the measures taken “There is no way they will stop anything” Because the government “does not understand that the dimension of the problem is of fiscal and monetary origin”.

“With action on receptive tourist dollars, they’re only going to step everything up because they’re confirming that they have a completely misdiagnosis of the matter,” he pointed out.

Javier CasabaliThe Adcap Grupo Financiero strategist argued that “at a time when the market is asking the minister to clarify how he plans to reduce the deficit, a project universal base salary who proposes to increase it, If the only way to finance it is to issue more, it is natural for the dollar to appreciate.More and more pesos for less and less dollars”

López Alfaro commented that “They need to come up with a plan, a budget trajectory and take more substantial action to calm the market down”,

Along the same lines, Repetto argued that “Terrorist measures must be accompanied by broad political support, President if he gives a press conference Albert Fernández, vice president Christina Fernandez and Minister of Economy, sylvina batakiso saying they are all Commitment to meeting IMF deficit target And they are going to do it by 2022 and 2023, whatever happens, and show how they are going to do it, the dollar will calm down.

“But as long as they continue to issue and spend, the pressure will continue to rise,” he speculated.

Albornoz agrees that “economic policy is going through a deep crisis of credibility, We must overreact in monetary and fiscal matters Give a strong signal to the market that this very delicate situation is still likely to be reversed”.

Financial Analyst, Christian Butler That “you are not solving the race with this dollar measure for tourism” and in this scenario “it is very difficult to know how far the dollar can go while the government continues without giving the right signals”.

,The only way to fix it is to dry out the weight class.The BCRA should go out and absorb the pesos in a stronger way than it did when it went out to buy peso bonds, so that it stops putting pressure on the exchange rate and for that she’s issued over a billion dollars As in, until they do, it won’t calm down.

Another broker said: “It’s a bullfight, it’s more reckless than ever to try to reach the cap, the transaction is dollar against peso, and nobody wants to sell dollars.” ”

What would be the other solutions?

In this area of ​​stocks and tensions on exchange rates, the government is considering measures to try to accelerate the payment of currencies to exporting grain companies in the coming weeks.

Due to currency uncertainty, these sales have slowed, in a scenario where soybean producers are even more conservative.

A trading channel has been opened. The idea is to send a window of time in which soybean sellers make a financial profit.

Talks with exporters are led by the Minister of Agriculture, Julien Dominguez.

in the last hours Rumors spread that a differentiated rate change could be implemented for exporters,

Even then, official source The government assured thatThat’s a big shit of dollars for agriculture, There is no such thing” and pointed out that “it is part of the speculation aimed at forcing the foreign exchange market by limiting the supply of foreign currencies”.

“notor any measure is not evaluated that aims to improve these exchanges for agriculture”.They said ..