The way in which the dollar went for a year, no one expected. According to estimates of the main economic consultants, it is predicted that the value of the American currency in December 2018 will be 20 pesos. Even this number did not go beyond the budget for 2018, represented by the ruling party. The reality was very differentThe weight suffered the most devaluation since 2002 and currency growth was 105.3% during the year.
On the last day of the year, the dollar fell by almost 80 cents compared to the previous day, starting the weekend without activity in the markets from $ 38.84, with a base interest rate close to 60 percent. The decline was strongly marked in the wholesale market, where the currency began to rotate to $ 38.20 and closed at $ 37.67.
The central bank was trading at a price of $ 36.90 to the buyer and $ 38.84 to the seller during the day this Friday, when on December 29, 2017 its price was $ 18.42 and $ 18.92 for both ends. Thus, the us currency increased something over 105% during the third year of management of Mauricio Macri, a brand that will be one of the highest in national history.
The impact of tax revenue on financial income and country risk at maximum levels for four years adds a fraction of local uncertainty to the time of year in which investors rearrange your portfolios. For example, on Thursday, the currency completely changed the initial growth and closed with a drop of 30 cents in the wholesale segment, while institutional investors gave out dollars to settle in high-yield pesos.
Causes of instability
The constant fluctuations of the American currency were surrounded not only by economic instability, which still persists, but also by political changes caused by currency distortions, There were two changes in the headings of the Central Bank, two agreements on cash loans with the National Monetary Fund, radical changes in the physiognomy of the cabinet, and a central adjustment policy that predicted zero budget deficit for 2019.
There were several reasons why the dollar doubled its value in the last 365 days. The first signs of an increase in demand for the US currency occurred a few days before the 2017 shift. On December 29, at a press conference, Chief of Staff Marcos Peña, Finance Minister Nicolas Duyovne and Ex-officials Luis Caputo and Federico Sturzenegger changed the “inflation targets” for 2018
Measure sought "relax" monetary policy and lower the interest rate in pesos to stimulate economic growth. It did not work. The dollar began to grow gradually, spent 20 pesos and slowly, the central one began to intervene in the market to avoid growth.
In May, the first critical situation occurred. Mauricio Macri announced that the government I was going to ask for a loan from the IMFamid a brutal economic storm. The dollar rose to 25 pesos in a few days, with strong central containment at the time of Sturzenegger.
Little by little the dollar continued its bullish course. Following the departure of Sturzenegger, the presidency of the Central it was in the hands Luis Caputo. Within a few weeks, the currency has stabilized. But some tails caused by commercial tensions between Turkey, which caused the devaluation of the lira, caused even greater instability.
Then Makri announced a change in the financial program with the IMF. The dollar rose again by more than 34 pesos and this caused another devaluation impact in weight. Caputo left his position and entered Central Guido Sandleris, who a few weeks later announced another system of restraining the growth of the American currency.
Central began to implement the so-called "floating line" of the dollar, through which he placed the roof and the minimum reference to the currency. In case of revision of these figures, the Bank will intervene in the process of buying or selling as necessary. Since this system was created, so far, cost ranged between 36 and 42 pesosto end the year at $ 38.85.
In addition, the company has applied another measure, which allowed to dry money on the market. The “vacuum” of the central pesos allows for the time being, through daily trading, to sell banks financial instruments called Leliq.