BASE SCENARIO November 2023

Base Scenario  Reports

 

Back to

Back to : 

BASE SCENARIO November 2023

Milei's first signs are in the direction of some moderation. We believe that the idea of dollarization will have to wait, as will the closure of the Central Bank. We see a plan that includes the correction of relative prices, fiscal adjustment and structural reforms as very likely. We think that the new government will devalue the exchange rate by around 75%. With this increase, the real exchange rate will be in line with the historical average. Given that the current situation is worse than the average and reserves need to be accumulated, it is probably necessary to continue resorting to schemes where the official dollar and the BCS are combined to incentivize exporter settlements. With a devaluation of this magnitude we also expect the FX spread to be somewhat higher than ideal.