The post-PASO dollar: Guillermo Escudero, Regional Manager and Strategic Alliances of CryptoMarket
Argentina is used to seeing extreme jumps in the value of the dollar in the face of new internal political situations. Beyond the elections, we come with a year-on-year inflation rate of 100% (or higher) and exchange rates that largely accompany said rise.
If we look at the last year we can see in the graph that the exchange rate was at $300 per dollar (08/2022) and after the STEP we see it at $730, which if we compare it to inflation, gives us in quite a few terms close.
The rise of the dollar in this context was difficult for it not to happen, regardless of who won these elections, although there is a candidate who wants to dollarize, which generates the most extreme scenario of thinking at what exchange rate is he going to dollarize?
The rest of the candidates also do not have an economic plan that could visualize a drop in the interest rate, inflation and exchange rates, for which the path of this last part of the year was not going to be solved by an electoral victory, since the problem must be dealt with at its root.
Post-STEP the blue dollar rose from the area of $600 to the current $730, which is an increase of 22%.
What forecast can we expect for the next elections and after them?
As commented in the previous paragraph, let’s remember that there is no party or candidate that has a plan to fix the structural problem that the country has had for several decades, given that raising interest rates is a band-aid, just as issuing pesos is a bomb of time already in execution, and collecting via stock markets at rates greater than 100% is not going to stabilize the short-term markets either.
For which the forecast in principle is to expect that the exchange rates continue to rise, including the interest rate applied by the BCRA yesterday rose to 118% for individuals, and we can expect another path than the depreciation of the peso against the dollar , also generated by a market that tends to constantly demand foreign currency, getting rid of local currency.
For which any policy that comes from the next presidential candidate will be, for sure, in a shock format and not gradualist.
Do stablecoins prove to be an interesting instrument to become dollarized?
Indeed, today they are the best alternative, because the MEP dollar raised the parking lot, in addition to the fact that it has various restrictions for buyers, while the commercial establishments operate freely on platforms such as CryptoMarket and at a blue value assigned by the market .
Even on the weekend when there are no traditional markets or banks and the prices slow down, the crypto market demonstrated how it can assign values on non-business days since it is a market that is quoted 24/7 and can be operated accordingly without any type of obstacles.