On Tuesday, October 13, the Central Bank was successful in the exchange test: did not lose dollars in the resumption of the operations of a tense docking day in the heat of the protest against the government of the previous day. He bought $ 10 million.
But the relief could not be complete. The rise of the dollar “counted with liquidation” triggered the “gap” that separates him from the officer 102%, a distance that continues to mark the degree of uncertainty with which the Argentine financial market operates these days.
The definitions of the Deputy Chief of Staff, Cecilia Todesca, in Clarín opened a wide umbrella about the certainties that the government has when it comes to thinking about the dollar problem that has stained the economy for months.
Todesca was clear about what they think the peso will continue devaluing as up to now (tying the official dollar to inflation) and that with this “cap” an inflationary stampede would be avoided that would hit the pockets of the people and increase poverty.
Concepts such as “devaluations are contractive” or “If all Argentines want to save in dollars, the economy will not work” they marked the background of the official view in which the problem is that there are not as many dollars as people demand. In reality, the basic problem lies in the distrust of the peso rather than the strength of the dollar.
Dollars in the world are left over and, in fact, these days depreciation due to the strong US emission in the face of the coronavirus pandemic.
But returning to the issue of the exchange rate gap, the key is in how the government thinks reduce it 102% in which it has been galloping as a result of an official wholesale dollar of $ 77.43 and a “cash with settlement” (CCL) of $156,27.
Economists often say that with this photograph the demand for the official dollar is “infinite” in the understanding that it is an asset that is relatively backward.
A consequence of this reality and with the dollar being “blue” at $ 160, which could be considered expensive, is that there is a demand for “substitutes” for the dollar, which are those products that have incorporated pieces or parts valued at the official dollar.
Typical cases are the rebound in the sale of cars or motorcycles, bicycles, electrical appliances as a consequence of the fact that holders of pesos look for goods that contain “cheap” dollars.
Those defensive decisions with the paradox of believe save when, in reality, is consumed they are part of the package of consequences that spills out such a wide exchange rate gap.
The abc of those decisions run by account of producers holding grains or exporters that postpone liquidations pending a devaluation while importers rush to buy supplies and goods abroad for fear of this possible exchange rate jump.
One of the peculiarities of the current crisis is given that technically the official dollar is not lagging against inflation and other indicators but negative expectations from politics, and the comings and goings of the economy, make up a devaluation cocktail.
One way to calm the waters is to reduce the exchange gap and the government’s proposal in the mouth of Cecilia Todesca is to have “patience”. Even when?
In the official discourse, it is until the field dollars arrive for the US $ 2 billion that could arrive in the next three months in response to the temporary reduction of withholdings or those that would be liquidated in April (an eternity in the middle of the pandemic) the soybean exporters.
The dilemma is that with only a devaluation the economy does not start but with an exchange rate gap of 100%, neither.
Are there experiences of economies that have maintained 100% exchange rate gaps for a long time? Yes, says the economist Marina Dal Poggetto, “the one in Venezuela but there the dollars are from the state” here they belong to producers and savers.
Of course, when President Alberto Fernández speaks that dollars should “be used for production,” he is far from reassuring the spirit of currency holders.
The Central Bank practically knocked out the quota of US $ 200 per month that retailers can buy.
Of the more than 4.7 million buyers registered in August, some 3 million couldn’t make it in October. The dribbling was noticeably reduced and the defensive strategy for the reserves would allow him to continue “shooting” for a while.
In this “pulling” process, it will be necessary to include the counterweight between the issuance of pesos to finance the deficit and its impact on the dollar and inflation and the official need to generate attractive mechanisms so that people feel tempted to sell their dollars and earn with the weights.
Until that turnaround occurs and the economic horizon can be cleared of clouds and political tension reduced, Todesca will be right with his saying that if everyone wants dollars, this economy will not start.
But it is worth repeating that the problem is the peso, the dollar is alive and well.