How the narrowing of the gap impacts on the economy: good news for the BCRA and the effects on some sectors


The Minister of Economy, Martín Guzmán, and President Alberto Fernández; Official interventions and the inflow of capital from the payment of income tax contributed to keep the gap stable in February Credit: Presidency

The parallel dollar numbers and the exchange gap will surely be, these days, a daily relief for Martín Guzmán and Miguel Pesce. The thing is after months with currency stress and a threatening distance between the different types of exchange, a combo of official interventions and the flow of foreign exchange from the payment of the wealth tax allowed to extend, at least in the short term, the exchange rate calm, with a gap of the order of 60%, while the Government awaits the arrival of the thick harvest.

It is the good news to which an economy that has accumulated three years of recession aspires. That stage, with the dollar MEP around $ 137, the dollar CCL at $ 140 and the blue at $ 147, fine below the dollar ‘savings’ ($ 155), decompresses pressures and discourages speculative maneuvers, that in recent months had committed the reserves of the Central Bank and They motivated the agency to tighten the stocks and restrict access to foreign exchange for imports and luxury goods.

“This can help contain expectations and that is what seeing the counterfactual is for, that would be a problem. As with the debt issue, that if it was not fixed it gave way to a default that accelerated the gap and inflation, this is not of great help, but it does remove the problems of an inverse scenario “, he says Matías Rajnerman, Chief Economist of Ecolatina.


The stabilization of the exchange gap made it possible to contain the fall in Central Bank reserves Source: LA NACION – Credit: Ignacio Sánchez

The closest episode occurred in September 2020, when the gap widened and the blue dollar came to $ 195. At that moment, the Central Bank adjusted exchange controls to take care of its reserves, while inflation in October had a strong acceleration as a result of this surge in the dollar.

“A larger gap creates problems, because there are more incentives not to liquidate exports or not invoice them, or also to anticipate imports. The gap today is not low, but there are values ​​to which one company can accept to do so and another not. At 100% there are firms that are encouraged to elusive maneuvers and at 60%, no “, warns the analyst.

Your colleague Fernando Marull coincides with this diagnosis regarding foreign trade, which gives more air to the Central Bank and its search to add reserves. According to the analyst, director of FMyA, “The smaller gap has benefits because there is not so much retention of exports And, although importers do not stop demanding dollars, because the official exchange rate looks cheap, there is a slowdown. “


The Minister of Economy, Martín Guzmán, is betting on a 25% rise in the dollar in 2021 so that inflation is 29%

The Minister of Economy, Martín Guzmán, is betting on a 25% rise in the dollar in 2021 so that inflation is 29% Credit: Min. Of Economy

For the economist, who worked on the Ministry of Finance during the administration of Cambiemos, this drop in the gap reduces “expectations of devaluation” in the future, but it also generates negative consequences for economic activity. His analysis especially points to sectors that, in recent months, had a revival driven by the exchange rate gap, such as the sale of 0km cars or construction.

“The drop in the gap hits the middle class more up, because those who win with a high gap are companies and families that have savings in dollars. When the gap widened, a wealth effect was generated that made construction rebound, with more demand for materials, more employment and today it is 11 points above its pre-crisis level. Conversely, the drop in the gap takes away purchasing power from the dollar saved and everything that was inflated slows down a bit, because the currency appreciates and costs go up, “concludes the analyst.

In any case, the analysts consulted by THE NATION do not project a long-term impact, because they warn that the drop in the gap is not anchored in structural changes in the economy. In addition to the official intervention, with the sale of bonds in the market, they warn that there is a favorable impact of foreign exchange income for those taxpayers affected by the wealth tax, who sell part of their assets in dollars through exchange rates parallels.

“The gap is a reflection of the uncertainty of the market. If the appearance of an economic plan is delayed, as it is not appearing, if the agreement with the IMF is delayed and if the Government does not manage to channel the fiscal and monetary variables, this path to lower the gap is not sustainable. It can overheat. The exchange rate gap at the end of the day is a reflection of the uncertainty in the economy “, said Juan Ignacio Paolicchi, an economist at Empiria.

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