After the announcement of the extension of the Chinese swap and after the end of the third round of the "soybean dollar" program, the exchange market will operate again this Monday with uncertainty, associated with the Government's ability to extend the relative exchange rate calm recovered in May while the electoral expectation accelerates in the face of the closing of lists on June 14.
Last Friday, the Argentine delegation in China confirmed that the country managed to renew the currency swap and even expand the amount by about US $ 5,000 million. This would give a virtual "firepower" to the Central Bank to intervene in the foreign exchange market for about US $ 10,000 million and thus avoid further spikes in the price of the dollar.
However, China's support is not enough to clear the exchange rate unknown and the negotiations that the Government is carrying out with the Monetary Fund are key for the market. The government wants the agency to advance all the disbursements planned for this year, a sum of US $ 10,800 million, which would serve to guarantee "the plan to arrive" at least until the PASO of next August 13.
And, although the Fund's dollars may appear, in the market they believe that the outcome of the negotiations may affect the exchange rate stability that reigned during the last forty days.
Delphos analysts explained: "It is difficult for the Fund to accept all these requests without greater demands for fiscal adjustment and a currency correction in the short term, which would complicate the chances of the ruling coalition in the presidential elections. It is very likely that the discussions will continue throughout the first half of this month, intensifying from the trip of the economy minister to Washington from June 10."
"The outcome of the negotiations will have strong implications for the stability of financial dollars and pre-election dynamics," they said in Delphos. Since April 25, Massa appealed to "all the tools at his disposal" to avoid a deepening of the bullfight.
And, by dint of new tightening of the trap, more intervention in the bond market, controls and new obstacles to the purchase of the financial dollar, he managed to restore stability on the exchange front. After its nominal ceiling of $ 495 in the last week of April, the blue managed to move down a step to $ 490 at which it closed on Friday.
The financial dollar did rise, but it did so below inflation, at a rate of 7.7% per month and in line with the devaluation validated by the Central Bank for the wholesale dollar. In the market they believe that, through and with the "reinforcement" dollars received, the exchange front could extend its calm during June.
Economist Fernando Marull, of FM y Asociados, said: "Massa has a lot at stake in the next 3 weeks: reserves, the dollar and inflation should remain stable if he wants to enter as a presidential candidate. On June 15 they give the inflation of May, on June 21/22 you have to pay the IMF almost US $ 2,700 million and on June 24 they close the lists of candidates for presidents. There are chances of more calm in June, so there would be chances of Massa entering the race."
Although the political component appears as key to projecting the exchange rate scenario, reserves remain the main variable monitored by the market.
After the meager results of the "soybean dollar 3", this week it will be seen if the Central Bank manages to maintain its buying position in the market, or if, without the impulse of the oilseed, it loses foreign currency again due to its daily interventions. Market estimates put net reserves in negative territory at between $1.300 billion and $1.600 billion.
"With the exchange rate trap, the thermometer will be the free dollar. A greater gap would force at some point to recognize the exchange rate delay and at the limit, due to pressure from the IMF and internal pressures, this scenario leads to a correction of the official exchange rate sooner rather than later. It is something that the Government has tried to avoid in the last 2 years, but the stocks to sustain this measure have already been consumed, "they warned in the LCG consultancy.
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