{"id":8144,"date":"2024-01-28T04:31:20","date_gmt":"2024-01-28T04:31:20","guid":{"rendered":"http:\/\/river-gas.com\/?p=8144"},"modified":"2024-01-28T04:31:20","modified_gmt":"2024-01-28T04:31:20","slug":"poll-argentina-peso-at-risk-of-another-devaluation-after-election","status":"publish","type":"post","link":"https:\/\/river-gas.com\/index.php\/2024\/01\/28\/poll-argentina-peso-at-risk-of-another-devaluation-after-election\/","title":{"rendered":"POLL-Argentina peso at risk of another devaluation after election"},"content":{"rendered":"

website poll data on Brazil real<\/p>\n

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website poll data on Argentine peso<\/u><\/p>\n

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website poll data on Mexican peso<\/b><\/p>\n

By Gabriel Burin<\/u><\/p>\n

BUENOS AIRES, Sept 7 (Reuters) – Argentina’s troubled peso currency is at risk of suffering another devaluation after October’s presidential election or a potential second round in November, a Reuters poll of strategists found.<\/p>\n

Last month, as part of an agreement with the International Monetary Fund (IMF), the Peronist government depreciated the benchmark official exchange rate by nearly 18% and pegged it at 350 per dollar in the wake of a key primary vote.<\/p>\n

But now it is expected to trade at 419.8 per dollar in 3 months, according to the median estimate of 19 economists polled Sept. 1-5. This would imply a 16.6% devaluation on the heels of the Oct. 22 vote and a possible second round on Nov. 19.<\/p>\n

Only one respondent saw the peso virtually unchanged at 355 per dollar in the period while all the remaining participants viewed a break of the peg, with estimates ranging from 383.8 to Goldman Sachs’ forecast of 700 per dollar.<\/p>\n

“Pegging<\/a> the official exchange rate is complex because inflation will have eroded any competitiveness gains obtained with the devaluation after the primaries,” said Lorenzo Sigaut Gravina, research director at Equilibra.<\/p>\n

“That is why, following a few weeks of calm, we expect a significant adjustment in the official exchange rate towards the end of the year … the IMF will demand another correction to make new disbursements,” he added.<\/p>\n

The Fund, which Argentine media says has questioned the complicated currency scheme of multiple rates, acknowledged “upfront efforts to strengthen the FX regime” as it released a tranche of the country’s credit line after the devaluation.<\/p>\n

In 12 months, the peso is forecast to weaken 65% to trade at 1,004 per dollar. In freely traded parallel markets, it is already quoted closer to that level, at around 720, for a nearly 100% spread over the official rate.<\/p>\n

Current President Alberto Fernandez and Economy Minister Sergio Massa – who the Peronists chose as their candidate to replace Fernandez – blame this year’s drought, opposition tactics, and corporate greed for Argentina’s economic woes.<\/p>\n

By contrast, the main political contenders Javier Milei and Patricia Bullrich, whose parties relegated the Peronists to a third place in the primary, point to excessive spending and money printing as the roots of Argentina’s financial ordeal.<\/p>\n

“The government will have to devalue again because it’s running out of gas – whether it’s after the presidential vote or the second round, that will depend on the results,” Gabriel Caama\u00f1o, managing partner at Consultora Ledesma, said.<\/p>\n

So far in 2023, the Argentine peso is down 50%. The Brazilian real and the Mexican peso, Latin America’s top currencies, have gained 6.4% and nearly 12% respectively.<\/p>\n

In one year, the real is expected to trade at 5.03 per dollar, just 1.2% weaker than its value on Tuesday. The Mexican peso is also seen with a relatively small loss of 2.3% in 12 months, changing hands at 17.84 per dollar.<\/p>\n

(For other stories from the September Reuters foreign exchange poll:)<\/strong><\/u><\/p>\n

(Reporting and polling by Gabriel Burin in Buenos Aires; Additional polling by Devayani Sathyan, Pranoy Krishna and Sujith Pai in Bengaluru; Editing by Alison Williams)<\/p>\n","protected":false},"excerpt":{"rendered":"