Exchange pressure: analysts expect a dollar of 50 pesos by the end of the year


Coupled with rising inflationary expectations, analysts also increased their estimate of the dollar's value by the end of 2019. According to the latest Market Expectations Survey released by the Central Bank, the exchange rate is expected to close at US $ 50, two pesos higher than expected a month ago.

The recalculation of these two key variables has its rationale: the dollar rose 11% in March, much more than all previous calculations. And, on the other hand, inflation would have been around 4%, far exceeding what experts had predicted before the beginning of the month.

In addition to adjusting the new calculations on the evolution of the dollar and inflation for the year, the danger is that future known estimates will continue to increase forecasts for both variables.

This deterioration of expectations, more devaluation and more inflation, represent a problem in itself, since it complicates the anchoring of the variables. In the case of the dollar, this represents a problem for the strategy of maintaining a certain "exchange rate" until the elections.

Specifically, why would an exporter hasten to liquidate currencies if a strong increase were expected in the coming months? Would not it be more logical to expect the exchange rate to approach the expected value of the dollar rather than rush to sell just when the government intends to "pass it"?

Of course This type of dilemma is faced by farmers who must decide whether or not they want to sell production and also cereals., which are those in which the dollar should enter when the sale abroad has occurred.

In addition, a dollar to $ 50 does not mean that the exchange rate will go out of control. Taking into account the closing of the wholesale yesterday (in R $ 42.85), this would mean an increase of less than 17% until the end of the year. And that evolution is even lower than the inflation that would accumulate until the end of the year. Always according to the survey released yesterday by the BCRA.

Meanwhile, it is still expected in the market for exporters to increase their currency settlement, which should start this week or at the latest the next day. In these early days of April, there was still no increase in settlements. Neither was the sale of foreign currency by the Treasury begun, which would start from the middle of the month at a rate of $ 60 million per day.


Source link