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Dollarization: sensitive data for the government and banks – 23.04.2019

Purchase of dollars by individuals it has reached 1000 million dollars in March, showing a 60% discount compared to the same period of the previous year.

The lower currency purchase compared to the beginning of 2018 creates a contrasting feeling: relief from the downturn and some concerns because it remains despite the fact that weight They are tall.

The search of overloading and for trips abroad, but the type of officials is still not possible change of investment portfolios before the uncertainty of the election year.

The President of the Central Bank, Guido Sandleris, determined the official position: "At the beginning of last year, before the currency crisis, 83% of households' assets They were in dollars. today this figure is 93%, Little is left dolarizar".

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The data is clear and would strengthen the idea that much of the Expected dollarization has already been made, and that they will remain a little pessos to continue buying foreign currency before the postulate that companies and people need them to make day-to-day deals.

The picture of this country's financial side once again clearly shows that Argentines use pesos go to the supermarket and pay taxes but when it comes to saving, the head is put in the dollar.

Banks, for their part, continue to notice and claim that the use of cash is very high compared to neighboring countries, and it is growing in times of inflation and high rates.

According to statistics from the financial system, cash withdrawals are close $ 400,000 million a month during the year, they represent about $ 120,000 million, equivalent to 30% of GDP.

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Obviously, people prefer money before aggregating payment rebates in stores by closing the widespread circle that 40% of the economy still works in black and that cash is sent when interest rates rise sharply.

Both the government and bankers point out that deposits period made by savers regarded as retailers (certificates of less than one million pesos) an increase of 4% in March and showed greater stability than those of wholesalers.

These data, according to officials, consolidate the idea that most of the dollarisation has already occurred and that the stabilization of deposits in the system, backed by high rates (46% per annum for a fixed term, she has only her own Achilles' heel in the expectations of the polls.

Meanwhile, the stock market is still struggling to stabilize within the new framework defined by the elimination of the monthly growth of 1.5 percent for the exchange rate group, which was fixed between $ 39.76 and $ 51.45.

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The wholesale dollar fell on Monday at $ 42.40 and moved away from the record of $ 43.83, which was hit on April 5, in a market that continues to feel the supply of grain exporters.

Relevant data on Tuesday was that the Ministry of Finance managed to put Letes in foreign currency for $ 750 million, which pay more (the percentage is 5.47% per annum) expiration on November 29, after a possible second round of elections to be held on 24 November.

Returning to the issue of dollarisation, another Sandleris' conclusion and approved by the bankers, is that potential foreign currency purchases from now to the end of the year may represent US $ 7,600 million, amount financiable for dollars in the field and for the IMF.

Thus, inside and outside the government, the idea that the stability of exchange until the election is the main contribution to this "lower fever" (4.7% increase in living costs in March and 2007) t projected 3.6% for April) and electoral expectations. To this is added the rise of risk for the country.

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On Tuesday, Argentine bonds fell again and led to another step towards the risky rate for the country reached 866 points, the highest level since 2006.

Markets that are far from acting just gave the news that The Ministry of Finance exceeded the fiscal target in the first quarter of the year on the path to the zero deficit.

At first glance the expectations that woke up a study that Kristina Kirchner will surpass Mauriceio Macri with eight points if there were a vote, Although it is not yet known whether the former president will be a candidate, it weighs more than the key economic data.

In the government, these days, they mutter with anger which despite the reduction of the fiscal deficit have trade surplus, reduce the balance of payments deficit, export energy, and receive a USD 57 million loan from the IMF.

Maybe because all this can not compensate Increasing infallible inflation and sharply decreasing real wages this still does not allow the recovery of the consumption of a coming economyMbrada, that in election years people have more money in their pockets.

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