It may have sounded like a warning, but the sudden fuel shortage is a true reflection that the hope of being able to reach the elections with the main macroeconomic variables relatively controlled was not received. The reason given by the station owners is that after the virtual freeze after the PASO and the increase in the wholesale value (almost 20% more expensive than what the private user accesses at service stations), A mismatch occurs and generates shortages of certain products (super gasoline and diesel) in some areas. In reality, there could not be a more appropriate figure to diagnose the fate of the control and transfer scheme that the Government put in place to be able to arrive at the elections with a sense of normality. The “Arrive Plan” ran out of fuel.
Alerts. The control board had been showing signs of danger for some time. How could it be otherwise, the two variables closely connected to each other showed signs of the plan’s exhaustion. The devaluation at the time of the August elections only reflected the delay of the commercial dollar in relation to the financial ones, generated by market segmentation and the proliferation of stocks. But the price of food and other products increased with more sensitivity to the exchange rate, which was reflected in the 12.4% increase in the CPI for August.to and a subsequent drag of 5% for September. Private analysts estimated that retail inflation was 11% in September (C&T Economic Advisors) but that the price of food was once again above average, as was the wholesale index.
In its Retail Price Survey (RPM), the consulting firm Eco Go estimated for september ua monthly variation of 11% and 12.9% for Food and Beverages. “Food consumed within the home showed an increase of 12.7% this month, while those consumed outside the home were higher with an increase of 13.8%. Thus, in the last 12 months they accumulate increases of 143.3% and 170.5% respectively and leave a drag for the month of October of 2.6%,” he points out.
This effervescence was verified despite the multiplication of controls, sectoral agreements and the continuity of continuing to tread, above all, on an official exchange rate, increasingly distant from free and financial ones.
Precisely, the expectations of a future devaluation that the market deems inevitable to the extent that the exchange rate of the “Single and Free Exchange Market” (MULC) continues to lag behind inflation: the 22% devaluation of August 14 was already consumed before the end of September. Starting this month, the question once again becomes when the Government should devalue again, not to gain competitiveness but to avoid losing it. The successive plans to stimulate exports with a higher dollar or removing the withholdings that persisted brought some oxygen to the Central Bank’s diminished reserves, but it is also showing signs of exhaustion.
The other big indicator, once again, is the dollar. If by the end of September the financial and free rates (cash with settlement -CCL- and blue) already exceeded $800 ($830 for the CCL), it was higher, even for the dollar at the exit from convertibility (autumn 2002) than according to the economist’s calculation Fernando Marull was an updated value of $776. But the first week of October slipped away and the hypothetical question is already beginning to take the form of a meme: When will the dollar be worth $1,000? No one was surprised that it was at the end of the year, but now with the CCL above $900, it is not ruled out that it will touch that value before the general elections on October 22. In this regard, the economist Martin Rapettiexecutive director of the consulting firm BalanceI do not doubt: “Under electoral uncertainty and with a government without the ability to anchor expectations, forcing a devaluation was only going to accelerate inflation without generating improvements in the real exchange rate. It lasted a month”.
Sequence. Just in case, the The World Bank has already changed the outlook for the Argentine economy that it had made a few months ago: it reported that the country will register a recession of -2.5% this year (before it was -2%) but will manage to have a rebound of 2.8% (before, 2.3%) in 2024. The acute drought crushed the last agricultural campaign with losses of up to 50% in exportable balances and removed US$20,000 million from the BCRA’s already scarce reserves, forcing the continuity of stocks, driving the swaps with China and opened the doors of when an international organization had a dollar to lend.
For the economist Esteban DomecqPresident of Invecqthe end of September indicators (135% gap with the financial dollar, US$ 900 million loss of net reserves, a country risk 20% higher than in August, 10% drop in dollarized bonds and 14% less in the case of stocks in pesos ) It only reflected the massive flight of the peso and the search for financial refuge with the widespread dollarization of portfolios. “The fiscal lack of control of the Platita Plan that they activated after PASO, in a context of monetary overflow (due to fiscal and quasi-fiscal issuance), lack of dollars and extreme political uncertainty, aggravated by inconsistent and destabilizing proposals, deepened the crisis of confidence and led to a desperate search for refuge“, Explain.
With the elections in the middle and without firepower, the Government, in order not to mortally wound the chances of its presidential candidate, announced that it will postpone payments to the organization until the end of the month, unifying them. That is, with the result in and the next political roadmap in hand. The other solution, nothing original in the manual of Argentine exchange crises, is to carry out operations in the “caves” and over-the-counter markets of the microcenter. An eighties remedy only effective for one day and for the electoral platform.
The Inca treasure. In this context, two facts did not go unnoticed. The first, the minister-candidate’s announcement during the first presidential debate that he would launch as part of his (presidential) monetary stability policy of the “digital peso.” Without much more precision than a campaign ad, the species suffered its own dialectical defeat when it was linked to the Chavista regime’s failed attempt to establish its own cryptocurrency, the Petro, which ended up languishing, precisely because of the lack of reliability that the market gave to the Venezuelan economic authority to support it. Furthermore, it sounded like an irony that the same minister who has to live with a runaway dollar and says he rejects dollarization, embrace a currency that in reality acts as a lifesaver for the peso but that would force the Guzmán-Massa management to do what it could not, did not want or did not know: not to use the Central as its own cash register.
Hours later, during IDEA Annual Colloquiumthe star of the meeting was the president of the Central Bank of Peru, Julio Velardewho did nothing more than recall the policy carried out by the organization he presides over for a quarter of a century, which he summarizes in four prohibitions that mark his field without discussion: 1) finance the Treasury; 2) unfold the exchange rate 3) buy state bonds beyond the set limit and 4) establish parameters so that banks lend money to certain sectors over others. This basic recipe in a country that is a neighbor and that has the highest rate of political instability in the region. The essential, this time, is visible.
