The goal is for the yield in pesos to exceed the rate of devaluation. That would give exporters more incentive to liquidate. The experience of the exchange jump of 2014
The second rise in interest rates of the year that the BCRA is preparing does not have the objective of controlling inflation as almost all the central banks of the world do. The main purpose of the measure that would be taken imminently is to prepare the ground to accelerate the rise in the official exchange rate . In this way, the most attractive yields in pesos should be a “carrot” for exporters to rush to liquidate.
The acceleration in the rate of increase of the “exchange table” of Martín Guzmán can be counterproductive. It happens that the exporter will try to delay the liquidation of foreign currency as long as possible to obtain a higher exchange rate. To prevent the sale of dollars from being delayed during the heavy harvest, it is essential that the rates in pesos be more attractive.
Those who remember the devaluation of January 2014, when the exchange rate jumped from $6.50 to $8, point out that the main error in the previous weeks was to accelerate the increase in the official exchange rate but without touching the rates. . In this way, an exchange rate adjustment with a discreet jump became inevitable, which is precisely what the current government wants to avoid.
The dollar rose at a rate of 1% per month until the legislative elections last November. From there, it accelerated to 2% in December and January, but since the end of last month and so far in February, the rate of devaluation is already exceeding 2.5% and on some days it is close to 3% per month. .
The acceleration of the official dollar put a brake on the incipient exchange rate delay. Now the official exchange rate is slightly higher than before the elections, which implies an improvement in competitiveness for exporters. To this, of course, we must add the rise in the price of soybeans and other raw materials that Argentina exports. The dollar in real terms, however, remains 10% lower than the level of a year ago.
With an expected inflation close to 55% (as it emerged in the last Survey of Market Expectations), the Central Bank requires that the increase in the exchange rate be accelerated to avoid an even greater delay. But in the same way, it also requires a parallel increase in interest rates , which will accompany this acceleration in the rate
The BCRA itself had indicated at the end of the year that one of its objectives was to achieve “positive” real interest rates, that is, that they be above inflation. Although an increase from 40% to 42% might not be enough, in reality the effective rate would already be close to 50% per year. The calculation of reinvesting interest on a monthly basis throughout the year, a common practice in banks when investing in Leliq.
This greater “alignment” of inflation with the interest rate and the evolution of the official dollar is largely contemplated in the agreement with the IMF. The organization's staff has already recognized that it is impossible to lift the exchange trap under these conditions, but it encourages a reduction in the exchange rate gap. And for this it is essential that the increase in the official exchange rate be accelerated. According to the calculations made by consultants and banks, the dollar should end up between $150 and $160, while cash with liquidation should not exceed $260. In that case, the gap would drop from 100% to practically 60%.
Another element to take into account is that the IMF does not see with good eyes that the Central Bank uses the reserves to intervene in the foreign exchange market. That would allow a greater amount of foreign currency to be accumulated in the coming months, but the consequence would be a faster rise in the official dollar.
