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Home / argentina / The rate fell, the dollar woke up, and country risk tends to increase: what happens this Wednesday will be key

The rate fell, the dollar woke up, and country risk tends to increase: what happens this Wednesday will be key

The central bank began to cut interest rates more tightly on Monday. but Since the monetary system is built from day to day like a house of cards, any variable threatens to cause problems with the continuation of adding cards.

Falling rates meant the sudden awakening of the dollar. Half an hour from the end of the wheel on Tuesday, surprised because rally The currency in that period was 40 cents.

The dollar opened at $ 37.17 and remained close to $ 37.20. Until 2:00. From there, he began an escalation, which left him at the maximum daily price of $ 37.75 (+ 1.61%). The total increase was 60 cents.

But this movement was not accidental. On Monday, the Central Bank ventured to make the most intensive rate cut, as it began to bid for the Liquidity Letters (Leliq). This movement repeated it on Tuesday, and the house of cards began to move there.

Banks are asking the Central Bank to raise the rate in order to resume Leliq, because they see problems of default in loans and credit cards. Central does not want to give up, so he was able to place only 150 billion dollars, which did not cover all the repayment terms and released 50 billion dollars. In one week, due to the lack of renewal of Leliq, the working capital increased by almost $ 135 billion. US, what if we add to nearly $ 20 billion. US, which he issued for the purchase of $ 490 million. The United States, in order to avoid a fall in the value of the dollar, has added a purchasing power of 155 billion dollars to the public. A significant part of this volume, as can be seen from the behavior of the dollar on Tuesday, went to the currency.

Rates deserve a separate analysis. The rate of decline of Leliq, the maximum amount that was paid, was reduced by 0.54 points to 55.95% per annum. But from Friday to Monday, the cumulative decline was 1.01 points. On average, a similar movement occurred. On the last wheel, she reduced 0.67 points to 55.64% per year. But between Friday and Tuesday the drop was 0.96 points.

Seriously, although the wholesale dollar rose 60 cents in one day, it remains 11 cents below the waterline.

What was a joy to the government – an exaggeratedly low dollar – now recreated the anxiety concluded in a week filled with errors. From the worst dimensions of the presidential image to the Rioja referendum, the bad news did not stop.

What darkens the prospects is that country risk has resumed its path of improvement, sometimes even in Zambia. The risk increased by 1.64% to 694 basis points, but the problem is that this measure in Argentina does not take into account the economy, but politics, because this is an election year. The increase was due to although Bonar 2024, the benchmark bond in dollars, increased by 0.10%, it did so below the growth of the wholesale dollar. This shows that a significant part of the merits in reducing country risk in the past corresponded to a delay in the exchange rate.

“With the fall in interest rates, if there were no election year, everyone would turn to dollar bonds, which would give double-digit returns, but they choose a ticket because they fear the election year,” he said. Federico Sidi Compass Group. “Who would not buy a bond with a maturity in 2033 and a yield of ten percent? Do you know what an investor is to provide such income for fourteen years? ”

Meanwhile, in banks and exchange offices, the dollar for the population rose by 43 cents to 38.57 dollars. "Blue" rose 50 cents to $ 38.50.

Reserves increased by 16 million to 66.445 million US dollars. Abroad 48 million were obtained due to the growth of gold and the euro against the US currency. In addition, you need to calculate the $ 50 million that Central bought at the beginning of the wheel to stimulate the growth of the dollar.

The external sector helps in its own way. Gold, for example, from mid-August to the present has increased by 11.20%. And this means that investors are looking for coverage, because Wall Street does not cause enough confidence. In addition, growing treasury bills reduce returns. If you add to this, it is likely that on Wednesday the Federal Reserve will announce that interest rates will not rise, they give a picture of calm, because Wall Street is growing, and with high rates on US bonds become a vacuum cleaner. dollars of the world.

The stock exchange had a good day, but with a small business for 576 million dollars, which is 40% of what was agreed in the middle of the month. This lack of operations has deprived the sustainability of S & P Merval's growth by 1.92%.

Banks and oil companies once again accelerated growth. Macros increased by 4.74%, while Supervielle increased by 1.86%. YPF (+ 3.75%) and Petrobras (+ 3.57%) preferred the growth of oil in the world. Brent, reference oil, rose 2.50%.

Argentine ADRs, certificates of ownership of shares listed on Wall Street in dollars, had another favorable result. IRSA with a 5% increase was the highlight.

Given that the dollar has lost its position against the Mexican peso, the Chilean and remained unchanged in Brazil, the growth of the dollar in Argentina attracts attention.

That is why the environment will be the key point to find out if this is a trend or a regrouping, to place it in the lower placement bar. You should also see if a sudden climb caused collateral damage. An increase of 1.60% per day makes the investor lose almost half of what he earns in a fixed term in a month. Two days at a pace they can affect the market. This will be the key point to see what happens to the currency that retained the buying trend at the close of the post.

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