2023-04-26 12:12:00
The volatile dynamics that the market is taking in Argentina did not result in any news at the money tables. Both traders and analysts, and even some government officials, admitted the last week the tools had run out and that a rise of central bank policy rate would be completely useless.
In the days subsequent to the adjustment of 300 basic points of the reference interest rate by the BCRAup to 81%, the market responded with a relentless demand for dollars. The parallel peso collapsed for the tenth consecutive day to reach an intraday minimum of 484 units per dollar.
The Merval continues bullish despite the pressures of the exchange market
“The central bank keeps losing reserves and doesn’t have many more left to lose. The market consensus assumes that, if US$5,000 or US$10,000 million do not appear, this economic policy will not reach October”, says the head of strategy of TPCG in Buenos Aires, Juan Manuel Pazos.
Without resources
If you know that the government has little room to change expectations. For a long time, the market discounts that the current Administration will not continue after December and that it has serious limitations to apply long-term measures.
With all basic solutions exhausted, the Minister of Economy, Sergio Massa, promised on Twitter on Tuesday to use “all the tools of the State to order this situation.” These tools will includen interventions in the bond market and investigations and sanctions for market agents, in an effort to stifle demand for dollars, a person with direct knowledge said.
Massa’s disobedience, Kirchner’s fury and opposition inflation
In the afternoon, the Government went out to sell bonds in foreign currency of local law (Bonares) against pesos and to buy global bonds against dollars in the middle of the wheel, depending on the person. The intervention was visibly larger than in recent days and managed to strengthen the parallel exchange rate to 472 per dollar, from its floor of 484 per dollar. In the market they presume that the new strategydesigned to contain the effects of the exchange rate explosion, Won’t clear up your worries about the root causes.
The figure that speaks: US$580 million
Meanwhile, savers take precautions. In some Financial entities begin to take note of the withdrawal of dollars. Los Private sector foreign currency deposits have already fallen US$580 million (-3.6%) in the last 30 days Measured by the Central Bank and in the financial caves, the exchange rate hit a record low of 497 per dollar on Tuesday.
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