in a conversation with Channel E, Eric PaniaguaEconomists at Epica explained the impact of dollar withdrawals from central banks after the swap with the US and predicted exchange rate movements heading into December.
Swaps that change the reserve situation
In response to a question about the partial triggering of the swap with the US, paniagua I explained.Generally speaking, this means the withdrawal of dollars from central bank reserves.This means Argentina’s central bank will lose some of its available reserves.
The economist explained:This was an accounting device in which the central bank was supplied with reserves from the U.S. Treasury.“And now that money.”It goes right back to its origins: the American market or the American Treasury.”.
In this sense, he clarified that the following amounts are included:Approximately 2.1 billion dollars“Numbers provided by the U.S. Treasury to the central bank.”To stop him from running, which was expected before the election.”.
Exchange rate stability and outlook until the end of the year
When asked about the dollar’s stability in recent weeks, he said: paniagua He claimed:“November will probably be relatively calm,” but warned that “December will be a more seasonally mixed month.””.
The economist explained:December is very likely to be the month when exchange rates heat up.” is due to increased demand for foreign currency due to holidays and other seasonal factors.
For the possible equilibrium value of the dollar, paniagua I thought1,500 pesos would be a reasonable price.“, given that “Even in the worst moments, when opinion polls were very bad for the government and currency tensions were very high, it was never possible to break through that ceiling.”.
To that extent, he said:Caputo’s comments have reassured the government, and so have many manufacturing sectors.”, so the market is expected to stabilize around that price.
Political implications of the US and swaps
Regarding America’s interest in this agreement, an economist said:The United States gained little in both nominal and real terms.”.
for paniaguathe benefits were more political than economic. ”Trump and his team can show the American people that they did something positive with taxpayer money.“But he emphasized that.”It’s not a very important benefit to America’s finances.”.
The expert concluded that, beyond the symbolism, the swap’s actual impact on Argentina’s economy would be limited as long as local markets continue to pay attention to exchange rate developments and seasonal demand for foreign currency.
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