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How the dollar, soybeans and fiscal adjustment play amid the crisis over VIP vaccination

2021-02-23T23:31:28.531Z


There is an exclusive question among financial operators: will the Government reach the elections without a strong devaluation?


Daniel Fernandez Canedo

02/23/2021 8:18 PM

  • Clarín.com

  • Economy

Updated 02/23/2021 8:25 PM

The ton of

soy rising to US $ 520

and the blue dollar at $ 147 were two economic indicators of

relief

for a Government involved in an unprecedented crisis due to the lack of transparency about the vaccination process against the coronavirus and the impact of the VIP vaccination.

The consequences of a crisis that hits squarely on the "intangible" of the already very damaged mood of the population are unpredictable.

But the economic data, this time,

play in favor of financial stability

that, curiously, appears as the main asset of the Government.

Soybeans accumulate an increase of US $ 90 per ton since November, supported by the idea that the world will receive a wave of dollars from the Joe Biden government in an attempt to recover economic activity in the United States.

Grains, oil and most of the raw materials rise in

the heat of a global super liquidity that oil prices based on the weakness of the dollar and the policy of the central countries of

"free money", 

which in recent weeks began to show signs exchange.

The global market distrusts the consequences on inflation of an injection of funds equivalent to US $ 1.9 trillion and the answer has been a

rise in the interest rate.

10-year US Treasury bonds that paid 0.8% annually, increased their income to 1.3% and began to change the sign of the stocks of technology companies that soared without a ceiling.

And does that affect Argentina?

Argentina

is out of the world credit market

and if it wanted to seek funds, it would have to pay more than 17% per year (the country risk rate was once again above 1,500 points), while Brazil pays 3% and Turkey 3.5%.

It only has the domestic market to finance itself.

But amid a crisis of confidence, the blue dollar remains at $ 147, the "cash with settlement" drops 0.6% to settle at $ 141.62 and the Central Bank assures that they

stopped having to sell dollarized bonds

to deal to contain a rise in the currency.

Between the soybeans at US $ 520 that favors the liquidation of part of the retained grains (the farmers have to finance this campaign), and the sales of dollars from the large taxpayers, the Government found an

exchange "bridge"

that allows it extend the horizon of stability of the dollar.

There is an exclusive question among financial operators: with the novelty of soybeans and the inflow of foreign exchange from large taxpayers to pay the wealth tax, will the Government reach the

legislative elections in October without a strong devaluation?


The payment of the wealth tax will demand about

$ 400,000 million from the private sector

and it is assumed that a good part of these funds will come from the sale of dollars in cash with liquidation.

In fact,

the almost 6% decline in the CCL

so far this month is attributed to those sales from large taxpayers.

Dollars also entered this month due to the export of energy to Brazil and the Central's exchange balance continues to be greatly favored by the

lack of demand for dollars for tourism abroad.

Coming from an extreme shortage of foreign exchange and with a strengthened exchange hold, Martín Guzman and Miguel angel Pesce now aim to lower a

gap

between the wholesale dollar ($ 89.54) and the blue ($ 147) of 64% which is far from the 140% of October last year, when the parallel dollar was at $ 195.

The dollar gap is

the smallest since June 2020

and the Government's expectation is to be able to lower it to 50% to travel a path similar to that of 2015, when the official dollar was at $ 9 and the CCL at $ 14.50, with a similar distance to the current one, although with an extra zero in each figure.

Financial stability had its correlation in January in that, after a long time, Martín Guzmán's adjustment paid off, recording a

primary fiscal surplus 

(without calculating the payment of interest on the debt) of $ 24,074 million.

The basis of this surplus was in the

adjustment of expenses

(no more Emergency Family Income or loans or ATP for the payment of salaries) and in an extraordinary entry for the liquidation of withholdings on exports.

Without magic but with perseverance, Guzmán was

weaving together a fiscal adjustment

that he considers possible and convincing an aimless Kirchnerism in economic matters about the benefits of the balance of public accounts.

How will you be doing it?

Probably the

panic of a possible inflation spike

was a strong argument.

4% increase in cost of living

in December and January they had turned on all the red lights on the K control panel, and February leaves no room for great festivities.

Preliminary data indicates that the cost of living this month could be

around 3.2%.

For the Government it is already a relief that it is closer to 3% than 4%, but expectations are far from abating.

In fact, the

food

item

would be growing at 4% 

in February and the survey of expectations from the Di Tella University marked an increase to 45.2% for inflation this year.

Martín Guzmán predicted 29%, but

if 45% comes out, he would be celebrating.

Look also

Carlos Slim after his meeting Alberto Fernández: "You have to be patient with Argentina"

The "dollar-Guzmán" kicks off: bills seeking a new destination and other possible consequences

Source: clarin

All business articles on 2021-02-23

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