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Dangerous contradiction: cheap dollar and country risk above 700 points



The central bank made it clear that the dollar has a political side that exceeds the economicHe not only raised it to the lower waterline, but also bought a smaller amount than usual, which could improve the closing price. It seems more comfortable with the delayed exchange rate, even if the same problem arises that has led to the current crisis.

Delaying the exchange will prevent him from gradually leaving the scheme in the future. Because the debt is not restored in stages, but instantly. The proximity of the election can be the fire that ignites the wick.

For suddenly country risk increased by 0.72% and broke through the ceiling of 700 points. And this is the true measure of how investors see the economy. Everything else is a scenography that surrounds the main actor: investor confidence in Argentine bonds.

Bonar 2024, a benchmark in dollars, lost 0.24%, while the price of the US treasury rose in price and reduced profitability to 2.69%.Argentina has a big problem because it cannot even take advantage of the fact that the United States refused to raise interest rates.

to trade (sell dollars to deliver pesos using high stakes) this is a yo-yo, where the profit in local currency always returns to the dollarWhile the euphoria of profits that the Central Bank, which nationalized the system encourages, to absorb, through the Liquidity Letters, all fixed conditions, the dollar will remain deferred. But why don't people buy dollar bonds using a 10 percent annual yield? The answer is that most of the weights holders in fixed terms and in Lekape are on the starting line to go out and buy dollars when the weather changes,

Modification of the rules of the game in Vaca Muerta, which hit investment companies with which they were subsidized to start working on a deposit, fell heavily abroad. To increase the collection and reduce the deficit, the government again changed the rules of the game, and this adds points to country risk.

The dichotomy between high-yield pesos and cheap dollars is a mismatch of the scheme, because a devalued dollar means a thriving economy and bonds with falling parities that are not interested in investing in this prosperous country. The scheme is as unstable as the union of a team of ten great players and a goalkeeper without a goal.

On the wholesale market, the dollar opened 10 cents below the previous day and “Central” decided to “hold” it closer to the end, buying only $ 20 million for $ 37.58 instead of the usual $ 50 million. The currency reacted, but closed with a decrease of 22 cents to $ 37.53 and reached a lower mark of 33 cents.

This is what Central has another problem that limits it in buying dollars. Every time you buy a currency, you release pesos, and Leliq seems to deplete your aspirations. It actually changed the system. Now you will announce before each tender the amount you intend to place. He wants to have more control over the monetary base.

In a tender on Wednesday, he placed 160 billion dollars, which not only allowed him to absorb 5 billion dollars, but also allowed him to lower the interest rate. The rate of decline, the highest rate, fell by 0.74 points to 55.19% per annum, while the average rate dropped by 0.76 points to 54.89% per annum.,

In banks and exchange offices, the dollar was sold to the population at 6 cents more expensive, at 38.59 dollars. "Blue" lost 50 cents, which he won the previous day, and amounted to 38.25 dollars.

Reserves increased by $ 39 million to $ 66.406 million.Despite the fact that abroad the rise in price of gold and the euro earned 48 million dollars. In addition, we must add a purchase of 20 million and deduct 82 million for payments to international organizations and Brazil.

The stock market experienced the euphoria of world markets when it was confirmed that the Federal Reserve System had confirmed that the interest rate would not increase, and declared its concern about the world economy.

With a business below what was usually up to 15 days ago, S & P Merval grew by 1.49% with operations of $ 592 million.

Banks continued to raise the index. The Supervielle (+ 4.19%) and the French (+ 2.54%) were the brightest. The increase in oil by more than 2% affected the increase in Petrobras (+ 1.77%) and YPF (+ 1.11%).

Tenaris from Techint Group increased 2.29 percent. The company was not affected by the reduction in gas subsidies received from Vaca Muerta, because TecPetrol is a company that manages the field and has no shares in the stock market. Only debt issued abroad.

Argentine ADRs, certificates of ownership of shares listed on Wall Street, almost increased. The best passed through Banco Supervielle (+ 3.8%) and MercadoLibre (+ 3.1%).

Thursday ends with a month and hedging operations will be conducted. The peso is the big winner, and the dollar seems doomed by the end of January below the flotation band, a story that may be repeated in February or at least in part of the month. Another story that has great chances to follow is an increased country risk. Investors do not want debt in argentine dollars, although there is more demand for securities in developing countries.


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