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Guzmán contains the dollar, but the market expects a greater rise after the elections

2021-08-06T13:54:08.448Z


The Central Bank intervened in the future dollar market and lowered coverage rates. But uncertainty grows in 2022.


Juan Manuel Barca

08/06/2021 8:52 AM

  • Clarín.com

  • Economy

Updated 08/06/2021 9:22 AM

Martín Guzmán is committed to containing the dollar in the coming months.

His promise that there will be no shock and that the dollar will close at $ 102.40 in December according to expectations, was accompanied by a

determined intervention to appease the expectation of a rise in the exchange rate

in the short term.

To hedge against a possible currency jump, companies and investors position themselves in

the future dollar and bonds tied to the exchange rate

(dollar linked).

And what the implicit rates of these instruments in pesos reflect is that no devaluation is expected before November.

Futures are contracts between two parties that agree to buy or sell an asset for a value on a date stipulated in the Rosario Stock Exchange (Rofex).

The contracts expire on the last day of the month in which they were agreed and that day the difference between the contract price and the official price is paid in pesos.


Last week,

the implied rate for shorter futures contracts fell from 29% to 25% annually.

That market was in the sights of the Central Bank

, which did not hesitate to intervene on the last day of July.

He sold $ 250 million and made $ 10 million on the position that expired at the end of that month.

The intervention was the first since April

and it was a bullet that Miguel Pesce's men kept to themselves.

Due to the exchange rate run, last October the BCRA sold more than US $ 5,600 million to lower rates of up to 80%, positions that were due to reach zero in May.

Future dollar position of the Central Bank.

Source: Eco Go

The official strategy paid off immediately.

But

what began to be observed is a greater expectation of devaluation after the elections

.

Thus, contracts that expire

in April 2022 they forecast a dollar at $ 130 and an implicit rate of 46%.


"The most interesting data is that the rates of short and long-term contracts are dissociated.

The market believes the Government that it is not going to devalue from here to the elections, but they do not believe it after

the elections and expect a greater devaluation. "said the economic analyst of

Ecolatina,

Juan Pablo Albornoz

.

Distrust was also reflected in the peso debt market.

"The new intervention (of the BCRA) corresponds to the need to align rates with the exchange rate objective they have. The issue is that

the market thinks that rates should be higher,

something that can be seen in the last tenders ", exp

licó

Sebastián Menescaldi

, associate director of

EcoGo

.

Short-term implicit rates in the future dollar.

Source: Eco Go

The Ministry of Economy last week sought to calm those expectations with two bonds tied to the exchange rate for US $ 456 million, a tool it used last October to curb the tensions that led the blue to the record of $ 195. Despite the sweetener, the last tender was one of the weakest since

only 65% ​​of what was due was placed

.

The Kicillof scheme?

The Government decided this year to "iron" the dollar so that inflation does not exceed 50% year-on-year.

Now,

the market reads that Guzmán could emulate the scheme of 2013

, when the exchange rate was stepped on in the first semester and then accelerated to devalue in January 2014, after the elections.

The Minister of Economy was Axel Kicillof and the head of the BCRA, Juan Carlos Fábrega.

The measure was accompanied by a rate hike and the easing of the exchange rate, something that

Guzmán does not intend to touch for now

.

In the economic team they believe that the IMF "understands" the need for the stocks and in

some offices, they would even prefer to limit the unregulated segment

(Senebi), the door that was left open after the restrictions on financial dollars.

Rofex future dollar implicit rates.

Ecolatina Fountain.

Meanwhile,

efforts to contain exchange rate pressures are not gratuitous

.

Despite the purchase of US $ 714 million of reserves in July, the Central stopped accumulating net reserves that month and

shed US $ 410 million to keep the gap

in financial markets

at bay

, according to a report by Equilibra.

The other exit door was payments to the Paris Club, and to the IMF

with the transfer of US $ 344 million this week.

Imports are also a vacuum cleaner

.

After rising 80% in June and adding US $ 5.9 billion, in July they authorized US $ 5.7 billion.

The idea is that they do not exceed US $ 6,000 million.

Even so, the Central Bank preserves its firepower.

"The greater the gap, the more devaluation expectations increase. Although this was reflected in Rofex,

the BCRA has plenty of ammunition

to contain expectations in case they overflow," said

Tomás Ruiz Palacios

,

Cohen's

strategist

.


NE

Look also

Martín Guzmán said there will be no shock plan and denied a devaluation

After the restrictions, industry and construction rebound and are already above pre-Covid levels

Source: clarin

All business articles on 2021-08-06

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