Not by predictable, the news left margin to surprise. The informative raid of Friday, April 11 was left behind but not the straight of speculation about the hidden letter of the decision to leave behind one of the most visible restrictions that economic policy had since 2019: the exchange rate. BRightly, it is a monetary control scheme by which restrictions for the sale of foreign currency were placed, which results in a fragmentation of the change market. A portfolio of species with prices that assumed different values according to the regulation placed and/or the supply generated by an authentic labyrinth.
The day d. With the party already begun, the expectations about what could happen in the markets on Monday 14 was transformed into the center of attention beyond the usual economic agents. Finally, the first day of a relatively free exchange rate, with flotation bands of $ 1,000 and $ 1,400, ended at $ 1,233 in the average retail market value collected by the Central Bank. But the curious thing about the “slate” of that day was a detail that did not go unnoticed by the trend that had been happening since mid -January: the drainage of reservations. The floor passed, for the strong sales last week, to US $ 24,305 million, but on that day a 0 was in that movement. “Without intervention” appeared next to the “Buy/Sale of Currency” item. As water in the desert, the IMF sent the first US $ 12,000 million committed, to add US $ 15,000 million during the first year after the corresponding reviews are approved in June and November to, to complete with US $ 720 million from next year. In turn, we must add other US $ 6,100 million distributed in loans with a certain degree of free availability from international organizations distributed during the year.
According to the agreement, the initial disbursement will be US $ 12,151 million, representing 60% of the total program. Then, subject to the review of the reviews, the country will receive US $ 2,028 million in June 2025, US $ 1,012 million in November 2025 and US $ 723 million per semester from 2026. The counterpart, basically, is, in the short term that the exchange rate regime would be changed to make it more flexible and that there was an objective of accumulation of reserves, the other Achilles heel of the economic program. The explanation is in the irregular trajectory that showed the evolution of the international reserves of the Central Bank from the exchange of December 2023, shortly after the assumption of Javier Milei. After a first semester in which thanks to adjustment and devaluation they could recover. However, the payment of debt services and also the debts of the importer sector left by the previous management, prevented the expected growth and, from the second half of last year, was found in a plateau. The successful laundering, although it was partial, reached to give financial oxygen to the government and perhaps fed the delay in finding a more durable solution through a new agreement with the IMF to reprogram debts and obtain fresh funds. As of January, the initial abundance was transformed into scarcity and the drainage of dollars began to make visible as expectations of the need for a change in exchange policy arose. In this case, what was at stake was the sustainability of the economic program and the idea that any exchange alteration would break the convergence tendency (Interest Dollar). March also showed that maintaining 1% crawling-peg that had been reduced to force inflationary deceleration, was a battle with an uncertain end. If not to stop delaying (relatively) the dollar was the way to lower inflation, but it resurfaced by devaluation expectations before the obvious shortage of reserves, the decision was already taken. But the assumed risk is not less and is going to unravel as the year elapses, which is also electoral, so the perception of economic stability is key to a ruling party that needs to gain legislative power, to remove ghosts of ungovernability and remain the owner of the anti -inflationary struggle as its most important political asset.
Adaptation. The March Consumer Price Index (CPI) was released, precisely, an hour before the formal announcement of the release of the exchange rate was initiated. The number of final 3.7%was much higher than February (2.4%), which in turn almost doubled the wholesale price index (1.6%). However, what attracts attention was the wide dispersion that the items showed, starting with the meat, which since January showed a rise much higher than the average of the food but that was also also recovering the least volatility of 2024. The “guilty” of this inflationary jump were precisely the food and drinks (+5.9%) and the clothing (+4.6%). If we see it by categories, the “seasonal” goods chopped in Punta (+8.4%) and the services (+4%), also explained by the processes of recovery of relative prices in private services and the indexation of public service rates, which will be the standard for 2025 to eliminate the red line that meant, for the treasure, subsidies to the energy and transport system.
Alfredo Romanohead of the consultant Romano Groupit is difficult to estimate the direct impact, But it sees an acceleration for two or three months depending on how the exchange rate and an IPC continue to act in the order of 4% to 5% for April.
For its part, to Osvaldo Giordano, President of IERALone of the negative aspects derived from the announced measures is that an additional increase in inflation will have to be supported. “Precisely, this is what encouraged to defer the modification in the exchange rate regime until after the October elections. The main consequence of having made the decisions is now that the recovery that the remuneration (wages and retirements) and the level of economic activity ”will be let go” and the level of economic activity ”details. For example, the meat entrepreneur and leader of the COPAL Gustavo Lázzarisuggests companies that “New lists are not accepted, until there is a new real price of the dollar” and takes accounts: the dollar for importers was at $ 1,080 and for exporters (with the “blend”) $ 1,170. “If the real variation range will remain between $ 1,100 and $ 1,200, in terms of costs there will almost be no devaluation” suggests.
Camilo Tiscornia, Director of C&T Economic Advisorsargues that although there is no doubt that inflation depends on the monetary, these effects are not necessarily translated. That is, in the short term an exchange rate movement, such as the one that may now be with this release, is very incipient in its inflationary consequence. Beyond that the amount of money can be kept constant or limiting its growth, as programmed, there are differences in the impact over time. “I think that to appreciate it, you will have to see where the dollar is parked at first, where you start moving and there, eventually see what its dynamics are,” Explain. In addition, he points out that the new objective in this phase is to control the amount of money (M2) that would officiate as a “economic anchor” and the interest rate becomes a “endogenous” variable (which depends on another, which is not autonomous). “Thus, the interest rate and the exchange rate float, unless it reaches the limits of the exchange band set beforehand, from which the amount of money and the interest rate are endogenous ”holds.
In addition, for Tiscornia, which guarantees the fiscal order and therefore monetary containment. The Government’s commitment was confirmed with increasing the fiscal surplus to 1.6% of GDP, perhaps hopeful that economic activity showed recovery and also the tax collection that without other adjustment in progress could extend the positive cash numbers. The economist Nadin Argañaraz, President of the Iaraf, It shows that the national tax collection of the first quarter of 2025 would have increased an interannual real 8%, but by excluding taxes related to foreign trade, the rise would be 20% year -on -year in real terms. In terms of real interannual variation in these three months, the taxes with the highest fall (without taking into account the elimination of country tax) would have been personal goods (31.4%) and export rights (22.3%). The taxes with greater increase would have been imp. to fuels (204.4%), profits (39%) and Social Security (34%). “The evolution of the collection is explained by a combination of tax changes (changes of profits to human persons, PAIS tax elimination, temporary decrease in export rights, real rise in fuel tax, among the main ones) and by real increases in activity and income ”precise.
Suspense. The risk of this scheme is precisely that of a context of much instability in which the demand for money is very volatile and complicates everything. Or, as highlighted Sebastián MenescaldI, associate director of Eco Goof the objectives that the government is set during this year. In the first half of the year there is already a currency purchase goal of almost US $ 3,000 million and the challenge will be in I go achieving without raising the price or interest rate. In the second semester, the result will depend a lot for what is the traction capacity of the economy and the political capacity of Milei. “If suddenly inflation rises, the activity does not traction, or people are unhappy in the surveys, everything is complicated,”underline. On the other hand, if it is possible to establish that there is a longer horizon because Milei is doing well in the surveys, he believes that the program will have obtained more air to continue.
Bets Finally, another actor who followed the negotiation process with the Monetary Fund very closely was that of international investors. The great bet, after all, is to be able to do without institutional lifeguards and stop paying debt services with own resources to go to the global voluntary market.
Javier Timermanmanaging partner of ADCAP, It perceives that investors were very optimistic, mainly for the modification of the exchange scheme. “The fixed exchange rate that had before with crawling, although it was very timely to anchor inflationary expectations, did not produce the necessary dollars so that investors believe that Argentina needs to accumulate. E andThey were looking for a solution to that problem that wide bands, with a strong background package, seem extremely reasonable”, He dispatches.
In his vision, which excited investors, more than the amount of Silver of the IMF is the movement towards a much more flexible scheme, with the departure of the stocks, which is something they had been claiming, even since the time of the previous government. From the financial point of view plus the support that the United States gave it, it seems that they generated expectations that exceeded the forecasts of investors. “This is an election year and the dynamics can change at a time in the world where it moves very quickly from appetite to risk to risk aversion and in this freer scheme, Argentina will move much more in tandem with what happens in the world”anticipates.
The conclusion, according to this perception, is that the “phase 3” chose a more volatility scheme with the aim of accumulating reservations. This could imply, movements in inflation, with the aim of generating investment and accumulation of reserves, under the attentive look of the IMF, which is very demanding in that regard. And all in a scheme in which the trophy sought is, again to continue showing A sense of control of the main economic variables and that inflation, such as the “stock” belongs to a recent past. Nothing less.
By Tristán Rodríguez Loredo
