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Why does the market think that the dollar must be worth nearly 50 pesos today



The growth of the 96% rate from March 2018 to February resulted in a 55% decrease in the private sector's exchange rate. On the other hand, "institutional and other investors", both residents and non-residents, netted about $ 600 million net, indicating a turnover compared to net sales in February 2018 of USD 1,100 million, a product of the effect of the infection. the outflow of capital from emerging markets, which always stands out in terms of its intensity in the case of Argentina.

This did not seem to be the only reason for the lower demand for foreign currency due to an ever-increasing number of Argentines who can buy foreign currency with revenues that have deteriorated by more than 12%, but also companies that report a decline in sales over 10% of products in supermarkets and purchases, up to 40% in durable goods, such as motor vehicles, motorcycles and new and used dwellings.

Figure 5.2. Human exchange transactions
The phenomenon was observed with a unique intensity in reducing net purchases by people in 55% of the year to $ 950 million, compared to $ 2,100 million in February 2018, "which can be explained by lower purchases for accumulation and travel abroad" emphasizes the Central Bank in its monthly report on the stock market.

According to the Monetary Authority Survey, the number of individuals who sold ticketing on the stock market increased again in January compared to January, to 660,000, and 75% from the number of individuals in the same month of 2018 (380,000 The number of people who bought tickets through on the stock market, fell by about 350,000 compared to January 2019, which is 920,000 people. "

As usual, BCRA emphasizes: "Operations with individuals' banknotes are concentrated in lower strataIn February, 69% of gross sales and 67% of gross purchases were below USD 10,000. While salesmen had sales per capita of $ 1,025, purchases were on average $ 1,286 per month.

Increase in transactions in the real economy

In any case, the movement of currencies once again showed that the so-called "formation of external assets", not to say direct savings in foreign currency by the resident group, accounted for less than 2% of the total business operating in February. market.

Official report In the second month of 2019, the total currency fluctuation indicated that the total amount was USD 51,600 million, which is 21% more than the year beforeAlthough in the daily average the increase was reduced to 9%, it is a consequence of more working days.

Opposite, The volume of futures trading fell to USD 20,495 million in February, which corresponds to approximately USD 930 million per day, 15% less than in February of the previous year.

The worsening recession in March compared to March 2018, when activity peaked in the last 12 months, would lead to a continued decline in the formation of external assets of residents, on the contrary. , increasing the tension of the election climate and accelerating inflation to 4% per month, triggered the outflow of foreign currencies by foreign investors, resulting in a new correction of the exchange rate to $ 43. , as I tested 6 months earlier.

Substitution of the exchange after the peak of September last year

According to monetary authority statistics, in September, the multilateral exchange rate, the ratio between the prices of the currencies of the main trading partners of Argentina, the discounted inflation effect in each case increased to 135, 57 points with the base 100 on December 17, 2015, when the exchange rate the course was eliminated, the peso devalued by just over 26%, but now it has fallen to 118.7, the national currency was 12.4%.

Therefore, the market through banks requires the monetary authority to receive an ever-increasing interest rate so that it can achieve its zero emission target, because otherwise it requires that demand for dollars is more attractive, note that this is important return to the real level 6 months before the currency is lowered to $ 49, to today's values, and thus monitor the effect of internal inflation minus the average of trading partners.


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