Last night we learned of the decision of the Minister of Economy, officiating in an area that is the responsibility of the President of the BCRA, to lower the reference rate for fixed terms from 110 to 80% annually. That means the effective monthly interest rate is 8%, much lower than estimated inflation, which is why savers are going to continue losing against it. Said in street language, it completes the blender that has been exercised since last December 12, taking the dollar from $360 to 800, with which in a little while less than half of what was bought could be purchased until the 11th of that month. Now they are going to put the savings in the blender, with which the capital of the Argentines ends up being liquefied, since the capital is Consumption + Savings.
With what was previously expressed, fixed deadlines are going to fall in checking accounts and/or savings accounts and this will be consumed or dollarize in any of its forms. Whether through the stock market and/or blue or free dollar that, together with the non-renewals of the $417 MM of UVA fixed terms that the banks do not want to renew – since from December to today they had to pay 80% interest – they will to bring the values of dollars up in accordance with the level of country risk close to 1700 points.
All this leads to a inflationary rebound, normal and usual, in March as a consequence it is a month with those characteristics. Taking as inflation data for April – which is announced in May – close to 12%, the same inflation data that the country had last November with the difference that we would now have unemployment of 1 digits + poverty greater than 70% and economic activity paralyzed while in November 2023 unemployment was 5/6%, economic activity poverty close to 75%.
But returning to the subject of reference, it serves, together with the request made by the Chief of Staff to the IMF, to send the US$ 13.5 MM that he signed Mauricio Macri in August 2018 and in 2019 Alberto Fernández rejected the agreement to increase the BCRA’s reserves as unpayable, to which the response was that they would be evaluated in March funds according to economic and social data.
Concomitantly with the US$ 5 MM net that would remain after payments that come and have to be made, they could be met with nearly US$ 18 MM of reserves which would lead to a new convertibility of $ 4,000 to US $ 1; although to make it stronger it would need about an additional 17 million, which coincidentally is the number of fixed terms in US$ within the financial system and a possible convertibility of 2000 to 1. Subsequently, 3 zeros would be removed from the coin, reaching 2 a1. With which we would be in a monthly inflation of 6% but we would be in the peace of the cemeteries without economic activity and with unemployment beyond 2 digits and poverty above 70%.
by Fabián Medina
Image gallery
