Alert for reservations and a rumor about the tourist dollar

In these days the sale of soybeans ends under the extraordinary regime of one dollar of $200, and it was only in October that some US$3.885 million would arrive from the IMF, which would come out again to be used as payment of debts with the same organization. In summary, dollar more or less, the reserves of the BCRA are around US$ 35,000 million, this is 6.3% of the GDP. We should have reserves for the equivalent of 20% of GDP, this would imply about US$110,000 million, how far we are by God.

The monetary liabilities of the Central Bank add up to the monetary base plus the bills issued and the repos made, this accumulates a total of $12.0 trillion, of this total $8.0 trillion is remunerated at a rate of 75% per year, which means an effective rate of 107% per year. This would imply that, without issuing a new peso, one year ahead, liabilities could be placed at $16.4 billion. If reserves remained at current levels, the one-year dollar would be around $470.

If the government would continue to issue at current rates, one-year monetary liabilities could be around $20.0 trillion (optimistically) and, if reserves remain at current levels, the dollar could be at around $20.0 trillion within a year. around $570. This would imply a rise of 94.5% in one year.

It must be taken into account that, one year ahead, the Market Expectation Survey of 38 consultants collected by the Central Bank, indicates that inflation could be at 90.5% per year, while, for the wholesale dollar, expects a rise of 80.0% and places it at a value of $249.60. An alternative dollar value of around $570 does not seem unreasonable, as it would maintain a gap of 128%, whereas today the gap is around 100%.

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The BCRA in trouble

The Central Bank has a manifest problem of lack of dollars, in the last 15 days it made credit more expensive to producers who have more than 5% of the harvested soybeans as stock. Producers who sell soybeans at a dollar of $200, and have a company, will not be able to access the MEP dollar or bag in the foreign exchange market, it is a ridiculous resolution, since the company can distribute dividends to human beings, and these they could buy dollars without problems.

Measures to make tourism abroad more expensive will be announced shortly, this is more intervention with doubtful results, it is no longer allowed to buy tickets in installments and spending in dollars in the world does not stop. What happens is that the problem is not solved by intervening, the problem is solved by working on an economic program that allows us to have a competitive dollar, fiscal surplus and can generate more investment in the country.

As of December, the Central Bank must disburse an enormous amount of dollars because the 180 days imposed on local companies to pay for imports have expired, if the Central Bank does not give these dollars to companies to pay for what they acquired Abroad, we could enter into a commercial default, and this could activate the rise in alternative dollars.

The Central Bank has not held a conference or issued a document to reveal how it is going to overcome these challenges, where many dollars have to be disbursed and, as can be seen, it does not have them in reserves.

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In September, October, November and December, we will again have rising inflation, if by the end of the year inflation reaches 3 digits, the interest rate will go from the current 75% to 3-digit levels, which would have a negative impact on monetary liabilities of the Central Bank. If we add to this that all the new reserves obtained by the Central Bank could migrate due to the commitments assumed with international financial organizations and commercial obligations, the scenario looks very tight.

Conclusions:

.- In the year 2023 we have many doubts about whether Argentine exports will grow. Given the drought that the country is going through, this will impact the production of grains and cereals, which will cause exports to be lower than those of a year ago.

.- The government wants to put a lock on imports, so investment will not grow, this endangers any forecast of economic growth for the year 2023.

.- Sergio Massa’s Argentina intends to live with what is ours, not to let international tourism prosper, delay imports, postpone the payment of debt from private companies and bring forward the collection of tax revenues in 2023 to reduce the deficit in 2022. In this scenario, what could possibly go wrong? Most.

.- The context is clear, Argentina faces a scenario of shortage of dollars and abundance of pesos, this materializes in the market with a permanent and constant rise in alternative dollars, plus inflation that does not stop its upward march.

.- The government today pays an 85-day rate in pesos of 99.5% per year, a 13-month rate in pesos of 104.0% per year and a 50-month rate in pesos of 97.5% per year. It is clear that inflation is here to stay, the 2023 budget foresees double-digit inflation, it is a science fiction story, just look at the discount rate that the market puts on bonds, and you will realize what they are lying .

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Economic analyst

The Article Is In Spanishūü°Ĺ

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