“He who bets on the dollar loses“, was the phrase with which the collective memory associates a Minister of Economy (Lorenzo Sigaut, in 1981) trying to deflate devaluating expectations. A titanic task because that year, the “exchange table” was shattered and a price race began with the North American currency on edge. However, 43 years had to pass before that omen, almost a plea, could be transformed into a concrete reality: while in the first eleven months of the year inflation, Even with a strong deceleration, it stood at 112% against an increase, in that same period, of the official dollar of 24.2% and of 9.5% of the free dollar. Eleven months ago, fixed terms (both in the UVA-adjusted and traditional modality) also ended up matching the rise in the CPI. That is to say, this time those who kept the “greens” bore the brunt.
Career. If something deflated the dollar, it ended up being, without a doubt, the change in expectations that, although they did not have regular behavior, always pointed to a drop in expected inflation but also discounted a recessionary process with a slow rebound in the latter part. of the year. All measurements ended up confirming these forecasts, although in many cases the discrepancies between private analysts and officials focused on the intensity of the process. For example, In the previous REM measurement, the survey published monthly by the Central Bank, it predicted retail inflation of 2.7% for November, which was a little higher than that measured by INDEC (2.4%).
The defeat of the dollar was not only against the average peso, but, above all, against the valuation of other assets that rebound long before activity does. In that period, for example, the YPF share increased 136%, even points less than the Merval index (+143%), which brings together the shares of the leading panel. The difference during 2024 for the saver was notable and was evident in the offers made by banks and financial agents to capture the dollars from the cushion. This was another unique chapter in the current year: the flow of international monetary reserves was reversed, but even with the strong purchases made by the BCRA in the first quarter of the year, net reserves are still negative. The estimate of a report Personal Investment Portfolio (PPI) based on the latest updated data from the BCRA, they gave -US$8,174 millionbut showing a worsening of almost US$1,000 million calculated for the end of October, due to post-money laundering withdrawals.
Shipping The result of the money laundering was a turning point even for those who believed that it would be irrelevant to confront the economy’s most urgent problem in the last quarter of the year: executing a realistic soft landing program to get out of the labyrinth in which it found itself. the persistence of the trap. In the last two months, the price of the free dollar fell almost 10% and the gap approached a tiny 4%, meaning that all speculation about segmenting the exchange market became abstract.
Economist Marina Dal Poggetto commented in a recent report by her consulting firm Eco Go that, “seen in retrospect, the decision to use dollars from reserves to intervene in the gap in July, which seemed very controversial, became a bridge until a money laundering that was much greater than what we and the market expected. US$21 billion entered the system, there are still US$14 billion in deposits of which US$6.5 billion are kept in branches,” he stressed.
However, the voices that warn of a dark cloud in the medium-term scenario point to the validity of the stocks as an element that does not reflect the exchange market. In his message for the first anniversary of his administration, the President announced, among other things, the exit of the stocks and the introduction of the concept of currency competition “by 2025”, for which the peso and other currencies should be fully convertible. One of the main promoters of the initiative is the former minister Sunday Cavallowhich always maintained reserves with “pure” dollarization and with the disappearance of the Central Bank. Today their “suggestion” is that before fully liberalizing the exchange rate they should begin by eliminating the “financial” limit and the alchemy of the “blend dollar” by which part of the exchange gap is absorbed towards the exporter.
The origin. What would change with a system of this type with the demand for dollars? It is clear that with greater liberalization of the exchange market, the demand for foreign currency would increase due to the removal of restrictions, but also due to a predictable issue: since the last quarter of the year the economy has already been undergoing a recovery. Although it is not homogeneous and there are sectors that took the lead (agriculture, mining and energy), others do not clearly mark an upward trend. It was also supported by the expansion of credit as a result of directing part of the dollars raised through money laundering to productive sectors (US$2,700 million and subscription of negotiable obligations for another US$5,425 million): “with imports that in October reached US$6,000 million and the additional boost of credit and the exchange rate delay, the accrued current account will also change sign in 2025” , projects Dal Poggetto.
What did change the tradition of ups and downs around it was the emergence of the fiscal surplus as a pillar of economic policy. According to the consultant’s estimates Empiriathe fiscal result of the Nation will end up consolidating at 1% of GDP but, in addition, the positive result that the group of provinces also showed in 2024 is added. Some by raising taxes, others by lowering expenses or a combination of both factors. The challenge in the short term is to continue showing a decreasing inflation rate that converges to an increasingly lower floor with the programmed devaluation of the dollar and the interest rate. Easy to state, but increasingly difficult to execute: going from the blender and the chainsaw to the scalpel and the reengineering of spending requires major professional precision. The purpose for 2025, an odd year and therefore an election year, no less.
by Tristán Rodríguez Loredo
