In February, those who decided to save in free dollars lost against inflation, the fixed term and the official price

The “blue” dollar has lost its bullish momentum over the past month. At $375 on sale in the shrinking parallel market, the US dollar posted a loss of six pesos, or 1.6%, in February, ending a three-month streak of gains above inflation.

This way, free dollar saver lost in february against any other retail investment option. If you had placed your money in fixed-term contracts, you would have received a rate of 6.2% on a conventional fixed-term contract. If he had chosen a fixed duration in UVA, corrected for inflation, he would have obtained a similar return: the inflation index for February is not known but the consultants estimate it to be higher than 6%.

Who bought 1,000 dollars on the parallel market on January 31, had to pay 381,000 pesos. According to the February closing price, its capital is now worth 375,000 pesos.

So far in 2023, the free dollar maintains a gain of 8.3% or 29 pesos. And with the wholesale dollar at $197.16, the exchange rate differential stands at 90.2%, after peaking at 108% in January.

In this regard, it should be noted that the official exchange rate recorded an increase of 20 pesos or 11.3% in the first two months of 2023, above the parallel dollar gain and coupled to the level of inflationto the point that the devaluation of the peso regulated by the Central Bank begins to be the best predictor of the rate of increase in prices of goods and services.

Over the past six months, inflation has piled up -with an estimate of 6% for February- at 39.7%, against a rise in the official exchange rate of 42.3% (from $138.60 to 197. $16), and a free dollar advance of 28.9% (from $291 to $375).

“With a creeping ankle (gradual devaluation) a notch above and closer to 6%, this could serve as a prelude to a resumption of rate hikes by the BCRA in the event of a continuation of the recent acceleration in inflation, since it does not there is more room to accumulate a greater loss of competitiveness in a scenario of currency flight and questioning of reserve targets with the IMF,” the economist said. Gustave Ber.

Central Bank Regulated Peso Devaluation Begins to Be the Best Predictor of Inflation Rate

Experts from Ecolatine they have observed in recent months “an alignment of nominal variables (inflation, interest rate and depreciation rate); continued BCRA interventions in the peso debt market which contributed to favorable Treasury trading; and the achievement of the objective of reducing direct monetary assistance from the BCRA”.

“Now, the foundations on which this greater parsimony rests continue to be vulnerable. In this sense, and given the risks envisaged for this year, the initial success of the “Massa plan” was a necessary but not sufficient condition to avoid a disorderly correction and experience a crisis-free 2023 election, leaving several unknowns to be resolved. “, they pointed out from Ecolatina.

In this sense, a report Adcap Financial Group He explained that “December was the fourth month with a drop in GDP and if there is no real growth, until December, there will be a drop in activity this year. To this must be added the impact of drought and frost on GDP – studies predict losses for soybeans, corn and wheat of more than 2% of gross product – and that exports will be “trampled”. The result would be a year 2023 with less activity, less imports and more pitfalls”.

“With the objective of delaying a sharp devaluation and reducing inflation, Massa is ready to cool the economy by reducing imports,” he agreed. Juan-Manuel Valentifinancial asset analyst at Wise Capital.

Continue reading: