Free dollar at $219 and without a ceiling: the keys to understanding why the price broke 4 consecutive records this week

The so-called “blue dollar” (informal retail market) advanced 3.50 pesos this Wednesday and closed at 187 pesos for sale. Stock photography. EFE/Rayner Peña R.

The free dollar adds four consecutive wheels operating at record levels. This afternoon it added $5 to close at $219 on the parallel market, while financial prices continued to trend higher. Thus, In the informal market, the currency has accumulated an advance of $11 (5.3%) so far in January. While the exchange gap with the wholesale dollar rose to 110%, considering that this price rose three cents, to $104.34.

In this context, analysts consulted by Infobae They gave an account of the 4 factors that made the “blue” dollar break its own mark this week every day since Tuesday’s wheel.

It should be remembered that last Friday the currency closed at $209.50 and this week it started with a decrease of 50 cents in a context in which a holiday was celebrated in the United States. However, on Tuesday the free dollar made a jump of two pesos to register a new historical mark when reaching $211. In the next round, on Wednesday, the “blue” rose again in the same magnitude: $2 to close at 213 pesos.

While yesterday the upward pressure continued and the currency jumped another peso to close the wheel at $214, today the free dollar did not seem to have a brake, so it climbed $4 until reaching the unprecedented price of 219 pesos.

In this context, the analysts consulted by this medium recognized 4 key factors to account for the upward momentum of the free dollar: the strong issue that has been recorded since the last quarter of 2021 that left many pesos on the street; the uncertainty surrounding negotiations with the International Monetary Fund (IMF) to restructure credit stand by for USD 44 billion; the volatility of the international markets and the high inflation that makes people not want to have pesos and seek refuge in the currency.

for the economist Diego Martinez Burzaco, Head of Investments of Inviu, several issues converged to generate this scenario and the first of them is “the noise” around the agreement with the Fund: “The Government does not give clear signals and delays the negotiations. On the other hand, there are many pesos that were collected as bonuses, bonuses and those pesos that are turning around, given so much uncertainty and due to inflationary pressure, they go to the dollar in general.

In that sense, he said that “there is also a lot of international volatility and a greater demand for the financial markets” and added that “this is noticeable in the exchange rate.”

For Burzaco, the inflationary acceleration is also leaving the sign of the rise in the interest rate by the Central Bank, which went from 38% to 40% this month, concise. “That is why the rate is negative and is a burden that does not generate an incentive to be positioned in pesos.”, analyzed the specialist.

Meanwhile, the financial operator Christian Buteler, he said: “There are always several factors that drive the exchange rate. The main one is the brutal issuance that occurred during the last quarter of 2021. Although at that time, due to a greater demand for seasonal pesos, it was not reflected, once that demand began to fall it was reflected in the different prices of the dollar and it will have it in inflation”.

According to Buteler’s view, the rise in alternative dollars was expected later, perhaps in February and not in the first half of January.

“I attribute it a lot to the expectations that the Government created with the possibility of not arranging the loan with the IMF. The blue reacted first and a strong reaction is also seen on the part of the MEP dollar and Cash with Liquidation”, he considered.

“There are always several factors that drive the exchange rate. The main one is the brutal broadcast that took place during the last quarter of 2021“(Buteler)

Regarding what may happen in the coming days with the price of the free dollar, he said: “If the Government reaches a prompt agreement with the IMF, before March, within an upward trend, the dollar could rise without causing a crisis” .

Now, if we continue with these expectations and the chances of not signing with the Fund increase, the exchange situation could run wild”, he warned.

Meanwhile, the prices linked to financial activity continued with an upward trend: the cash with liquidation rose to $223.97 and the Bolsa or MEP, to $214.60.

While international reserves decreased by USD 90 million on Thursday and stood at USD 38,943 million, the lowest amount in 13 months. We must not lose sight of the fact that in recent days, the Central Bank sold around USD 140 million to intervene in the foreign exchange market.

In this context, the economist Gustavo Ber He told this medium that the adverse external climate must also be considered, together with the uncertainty about the negotiations with the IMF, “something that is accelerating the hedging process by operators, as a defensive response with the objective of preserving capital in the face of this scenario”.

“The combo of the monetary issue, the deterioration in reserves and inflation without respite does not contribute either, especially when the operators are anticipating that in the best scenario an agreement would be reached. light with the IMF -possibly even with delays- but without a comprehensive economic plan to move forward with macroeconomic imbalances, which is essential to try to reverse the vicious circle and thus recover confidence,” he stressed.

In turn, the analyst Sergio Morales I affirm that “what is technically known as lag monetary. The expansion of the monetary base for the entire year 2021 was concentrated in more than 80% in the second semester for electoral reasons, which was popularly known as the ‘Plan Platita’´. However, in the economy, the effects of monetary policies take time to have an impact and, like electricity consumption, now it’s time to pay the bill”.

And he remarked: “This was with higher inflation and subsequent devaluation of the free dollar, added to seasonal seasonings and uncertainty about external financing due to complications in negotiations with the International Monetary Fund. Consequently, it is to be expected that the price of the different exchange rates will continue to rise this year in accordance with the levels of inflation”.


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