The week, filled with currency turmoil, saw an exorbitant acceleration in exchange rates. Parallel dollars shot up and blue advanced $10 (2.3%) to $442. The rise continued steep this Monday, with a new record of $463 for the informal
The firing of the parallels occurred in the midst of the political shock generated by the “resignation” of Alberto Fernández to participate in the next elections.
On the other hand, on Thursday, after an endless wait for savers, the directory of Banco Central the nominal annual rate (TNA) rose 300 basis points of the traditional fixed term and of the Leliqs, up to the 81%to accompany the inflationary pressure that annualized continues above 100% (reached 104.3% year-on-year in March).
However, this measure fails to recompose rates so that they achieve positive returns, as occurred in previous months. Specifically, the effective monthly interest remains at 6.7%; that is, one percentage point below the general price rise in the third month of the year, which reached 7.7%.
In this context, while the BCRA reserves continue to be scarce, the The agricultural dollar seems incapable of capturing a sufficient amount of foreign currency to take pressure off the price of parallel dollars. In addition, the request of the International Monetary Fund (IMF) for the exchange rate not to lag behind inflation is added to the internal situation, since it adds tension on reserves and increases the exchange rate tension.
Faced with this scenario, analysts are redoubling their bets on a possible greater devaluation, a fact that also has its correlate in the future dollar quotes.
Dollar future: analysts comment on a post-PASO exchange rate jump
Dollar: will there be a devaluation jump?
While expectations of a marked depreciation of the peso are strongly emerging, dollar futures market bulges in volume and it shows a clear acceleration of the crawling peg (microdevaluations carried out by the monetary authority at the wholesale exchange rate so that it can be aligned with inflation).
In this framework, investors and businessmen began to protect themselves by acquiring these contracts that allow one dollar to be made at that moment at that agreed price, particularly those that are tied to large commitments in foreign currency, and that will need those currencies to settle their accounts.
In this sense, Joaquín Arregui, financial advisor at Extensio Finanzas, told iProfessional that the Government, for 3 and a half years, devalued daily in stages below inflation in order to contain the pressure on prices. And he claims that it is a discrete jump in the exchange rate is unlikely wholesaler, missing less than 4 months for the STEP.
“With the validation by the BCRA of effective interest rates of the order of 123% per year and almost 7% per month, we can expect that the crawling peg will not exceed this percentage in its monthly accumulation or, if it does, it will not be for a significant advantage”, says Arregui.
And with respect to the strong rise of these last three days, the economist warns that “these variations, which were 8.22% per month, served to accommodate the delayed devaluation of previous days.”
For their part, from PPI, they argue that the spread between the future dollar rate continued to widen, particularly for the August/September term, for which they consider that “the market continues raising its bets that some type of exchange event may occur just after STEP“.
The dollar futures operated with great activity in the week
How the dollar futures market moved this week
A large volume of future dollar purchases has been generated in the market, which led to a notable increase in price. For their part, the implicit rates in Rofex (the market where this instrument is traded) have skyrocketed this week. All sections of the curve of different terms indicated great advances amidst speculations about some exchange rate jump in the short term.
It should be noted that the highest increases occurred from August to November; that is, in the electoral prelude.
The implicit rates in Rofex climbed between 2% and 4.5% in the terms between June and November. Arregui maintains that although the implicit rates in dollar futures until July of this year are around 191% annual devaluation, from the future of August to December 2023 they comfortably exceed 200% year-on-year, steepening the yield curve in those months.
“This indicates that the probability of a jump starting in August becomes more likely, and as of December 2023 the market already discounts with absolute certainty that the exchange rate be released,” the expert added.
Martín Mazza, Senior Financial Advisor at Liebre Capital, along the same lines, tells this medium that on Wednesday the future of the wholesale exchange rate quickened its pace and rose to 165.8% annualized (TEA); that is, the largest increase so far in 2023.
“For the MATBA-ROFEX end-August contract, the market prices a hedge rate of approximately $330 as of the 31st of that month. The implicit rate being more than 140% TNA, which shows a large increase since last Friday when it did not operate above 123%”, adheres Mazza.
What will happen in the short term with the dollar?
The big question is what will happen to the exchange rate next. Regarding this, Arregui stresses that the devaluation percentages of the futures throughout the curve are carried out evenly, so if all the distant futures rise in value, clearly the closest ones -May, June and July- also do so. they will. “This does not imply that the probabilities of deep depreciation occur in these months, but rather that they accompany the general rise, but to a lesser extent”Add.
“If the Government made a discreet jump in the exchange rate towards $300 in the next few days, would wear down his fading credibilitygenerating an unimaginable discrete jump that would be transferred to prices until monthly inflation was above double digits,” concludes Arregui.
