In recent days the market showed a reaction to rise in alt dollarsthe gap reached 93.5% with the mep dollar99.9% with the dollar CCL and 101.8% with the Dolar blue. Generally, we said that when the gap was between 80% and 90% you have to buy, between 90% and 110% the decision was in the hands of the investor, above the 110% gap it is time to sell and buy other assets.
He dollar it is close to reaching profit taking. The price of the dollar with a gap of 120% is $490with a gap of 110% is $468, between these values is the ceiling of the alternative dollars.
Buying now at $440 does not seem very attractive, when the dollar is on the headlines, it is not the time to buy, perhaps it is time to sell.
In this context, the reserves of Dollars of the Banco Central they are US$36,412 million. Meanwhile, the three maturities that Argentina has with the FMI are as follows: a capital quota of US$2,638 million expires, in May a interest rate of US$639 million and a capital installment of US$2,691 million expires in June.
If Sergio Masa does not achieve a restructuring of these payments, From today to June 30, US$5,968 million would have to be disbursedand the reserves would be close to US$30,000 million.
It is central that Argentina achieve immediate restructuring of the debt with the IMF, or a new disbursement of funds that will allow it to settle the maturities of this quarter without touching the reserves.
It is essential that Argentina immediately achieve a debt restructuring with the IMF
The dollar close to a transitory ceiling: expectations
The field stopped liquidating, it is simple with the soybean dollar one you sold the soybeans and with the produced you bought the equivalent of u$s270 at the MEP price, with the soybean three dollar you bought the equivalent of u$s300 at the MEP price, with the dollar soy three purchases the equivalent of u$s244 at the MEP price.
The three soybean dollar lacks the attraction that previous soybean dollars had.
The government once again took the wrong path, the solution would have been a drop in soybean withholding from 33% to 20%, in this way a much higher price would have been reached, and there would be more vocation to sell merchandise, also to sow in the 2023/24 campaign. We have to clarify that there is little merchandise from the 2022/23 campaign.
From our expectation we hope a soybean campaign of around 20 million tonsthere are 6.4 million tons sold in the markets, which are 32% of the campaign, it is not a bad figure, generally by June 30 of each year 50% of what is harvested is sold, to reach that date 70 days left.
The problem is that there is little harvested merchandise, and the government wants to invent a conflict with the field.
The treasury in red
Yesterday it was known the fiscal result for the month of March, which was negative by $388,006 million, in the accumulated annual we have a deficit of $ 4,000,000 million. The treasury’s debt in pesos is $27,633,862 million. This does not withstand the slightest analysis, with a negative flow of funds and a high level of debt in pesos, it is difficult for our currency not to continue devaluing.
In the accumulated annual, Argentina has a deficit of $ 4,000,000 million and a sharp drop in dollar reserves
This is a partial analysis, since the treasury also has a debt in dollars of US$262,867 millionwhich is equivalent to $55,037,215 million, which is equivalent to double the debt in pesos.
What happens at the Central Bank
The Central Bank raised the monetary policy rate at 81% per yearthis implies a monthly rate of 6.75% for savers, when inflation is comfortable above 7.0% per month.
The Central Bank looks at the debt in Leliq with more concern than the performance of savers.
As of March, the debt in Leliq and other liabilities of the Central Bank totaled $11,567,814 million, which is equivalent to u$s55,357 million. Another unmanageable debt that at current rates one year ahead adds a similar amount of interest, since the effective rate is 119.0% per year.
conclusions
Negative treasury flows versus a debt of US$395,587 million lead us down the path of peso devaluation. If we increase the deficit, the peso has no floor.
A central bank with very low reserves, high maturities to face and a debt in Leliq that is higher than the reserves cause the peso to be devalued permanently in the market.
The state is like a company, if it has debt and negative flows, the discount rates are high for the stock of debt, and it is impossible to take on new debt.
You have to start at the beginning, without a positive fiscal result, we will not get out of this problem of high inflation, rate hikes and devaluation of the peso. Therefore, beyond the short-term volatilities, the dollar continues to be a store of value, and betting on the carry trade is foolhardy.
