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A trader works at the Buenos Aires Stock Exchange, Argentina
By Walter Bianchi
BUENOS AIRES, Jan 21 (Archyde.com) – Argentina’s financial market closed again lower on Friday hit by growing investor disinterest amid doubts about the development of the country’s negotiations with the International Monetary Fund (IMF).
Hedging in dollars puts pressure on the foreign exchange market, which renewed historical minimum values in the marginal price of the currency, commented operators.
“The absence of relevant news since the negotiations with the IMF, together with an external risk-adverse climate, continue to put pressure on domestic assets, despite punished valuations, a dynamic accentuated by an unfavorable technical position,” said Gustavo Ber, an economist at the study Ber.
The third largest economy in Latin America must pay some 730 million dollars to the IMF next Friday and another 365 million on February 1, before a large maturity of some 2,900 million in March.
“Argentina now wants more time to pay and wants to reach an agreement, which is necessary for both parties,” said Economy Minister Martín Guzmán in an interview with Le Figaro, adding that “the economy is doing better, but we need more time to to pay”.
* The interbank peso depreciated slightly 0.03%, to 104.34/104.35 units per dollar, under the permanent regulation of liquidity from the central bank (BCRA).
* Operators estimated that the monetary entity bought about 10 million dollars from the wholesale market, with which it closed the week with sales of about 130 million dollars of its reserves.
* The Argentine peso in the marginal market fell 2.28% to a renewed historical minimum level of 219 per dollar for sale, with which the gap compared to the official market widened to 110%.
* Operators estimate that the price of the peso in the informal marketplace is significantly behind inflation. The peso in the marginal market depreciated 20.19% in 2021 against an inflationary escalation of 50.9 percent in the same period.
* Portfolio Personal Inversiones estimated that “the large amount of pesos issued in the second half will converge with the seasonal drop in the demand for money in February. This could further inflate free dollar quotes and, consequently, the exchange rate gap” .
* In the alternative segments, the “cash with liquidation” (CCL) stock fell to 223.35 per dollar and the “MEP dollar” traded at 214.20 units.
* Sovereign bonds in the local over-the-counter market ended with a drop of 0.3% on average, with which they accumulated a drop of 1.1% in the week.
* The Argentine country risk rose 12 units to 1,919 basis points at 2000 GMT, very close to its historical maximum level of 1,910 points noted at the beginning of the week.
* “Securities in foreign currency continue to show very high rates of return (among the highest in the world), and operate between 20% and 27%. This not only makes financing more expensive for Argentina if it wanted to return to the voluntary debt markets, but also affects the private sector in case of wanting
borrow,” said Research For Traders.
* In the stock market, the S&P Merval index fell by 1.77%, to a provisional closing of 83,622.48 points, where the 3% drop recorded in the shares of the oil company YPF stood out. The leading benchmark lost 2.17% in the week.
* “Energy papers are more mixed pending news about the new rate scheme that would be applied,” commented an economist.
(Reporting by Walter Bianchi; With the collaboration of Hernán Nessi; Editing by Eliana Raszewski)