However, for the first time in the year, the official depreciation exceeds the rate interest in pesos. In 2022, the BCRA raised the reference rate three times. In January it took it from 38% to 40%, in mid-February to 42.5% and in March to 44.5%. The market now expects a new increase as a result of the new rate of depreciation and after the publication of the CPI for March (Indec will release it this Wednesday), which could be around 6%. This was stated by different analysts consulted by Ámbito.
Andres Reschini, of F2 Financial Solutions, maintained that his impression is that the Central has already chosen the rate of depreciation for April and that it will be around 4%. “If you want to sustain this crawling peg pace, there will probably be a new rise in rates after knowing the CPI for March, because those who have to liquidate dollars know that they earn more by waiting than by liquidating and placing at the rate, and that discourages liquidation and affects reserves”, he stated.
Adrian Yard Buller, economist at Facimex Valores, agreed in the analysis: “The devaluation rate is expected to accelerate to the area of 3.8% per month starting in April. The program with the IMF was planned with a 40% devaluation that the BCRA had been respecting, but that was designed for an inflation of 48% that quickly became outdated. With inflation going to be closer to 60%, the BCRA has to pick up the pace to avoid appreciating the exchange rate, especially considering that the first goal of Bookings fair was fulfilled. Rate hikes look more at the exchange front than at inflation.”
“The BCRA needs to raise rates if it wants to continue accelerating the rate of devaluation, since if it devalues above rates it will undermine its own reserve objective. If not, it ends up discouraging exports, since exporters prefer to leverage themselves and wait for a more favorable exchange rate. This is crucial since the Central Bank has a demanding objective of net reserves and, if it does not adjust interest rates, it will have difficulties to buy dollars. That is why the logic would be to see a rise in rates of important magnitude next week”, added Yarde Buller.
For Victor Cup, director of the Center for Studies for the New Economy, the acceleration of the devaluation rate is directly linked to the inflation rate, in line with what was agreed with the IMF, that there be no exchange delay. “With this level of inflation, the BCRA is going to have to increase the interest rate. Both the acceleration of the crawling peg and the rise in rates can help, to the extent that it can generate a greater sale of dollars by exporters. Likewise, a higher rate benefits placements in pesos and takes pressure off the parallel exchange market, allowing the gap to be narrowed even more,” said Beker.
For its part, Martin Carro, a member of the UNDAV Public Policy Observatory, warned about the dichotomy faced by the Central. “Among the objectives of the economic team is to maintain competitiveness because a trade surplus of goods is needed to meet all the uses of foreign currency and to increase reserves. However, a sharp depreciation can complicate price acceleration and impact growth,” she posed.
In this sense, he concluded: “A rate hike is likely, on the one hand, due to the signals given by the BCRA in the face of inflationary acceleration and, on the other, the market preferred shorter investments, because a new rise is expected. Banks currently place as little as possible in long terms with the BCRA. Likewise, a depreciation rate higher than the interest rate discourages the liquidation of exports. That is why one would expect a rise in interest rates since it gives more room to be able to depreciate at different speeds without achieving disincentives and avoiding problems on the external front, where it is quite strangled and with objectives to meet to increase reserves, around u$ s5,000 million annually”.