A man watches a screen with information on the Merval index in the city of Buenos Aires (REUTERS / Marcos Brindicci)
The Central Bank works to comply with the new strategy that it agreed with Sergio Massa. Lower the official exchange rate further, intervene in the alternative dollar market so that they do not rise and buy Treasury securities in pesos so that they do not collapse.
An unexpected inflow of foreign currency from the countryside pleased the BCRA, which increased its reserves by USD 140 million
These are good days for Argentine stocks. Profit-taking in stocks is sporadic and is followed by strong rebounds. Uncertainty is in the official market that continues to delay the dollar and generates pressure
It happens that the dual Treasury bonds, which are impossible to liquidate because they adjust for CER or devaluation, exceed USD 30 billion of which USD 13 billion mature in July. Even more serious: $9 of every $10 of the debt matures before October at an average of more than one trillion pesos per month. $1.8 trillion matures in July alone. The Government will have to deal with this and it only has two solutions: agree with the opposition or redefine the maturities, which is equivalent to a technical default.
On the other hand, “today the intervention of the Central Bank and the Anses in the market was noted and in the graphs the interference is marked, which is reflected in the disparity between the MEP and the free one that exceeds $25 and invites the roll (buy in the MEP and sell in the free market)”, said the financial analyst and expert in agribusiness, Salvador Vitelli.
Alternative dollars collapsed as investors sought bonds and shares: will the BCRA lower interest rates?
For today, the unknown is whether there will be profit taking because those who invest are impatient and enter and exit risk markets very quickly.
By manipulating the GD30, they managed to lower the MEP $1.43 (-0.4%) to $325.87 and the cash with settlement $23 (-0.6%) to 331.97 pesos.
The free, in turn, increased $2 to $357, but in cities of the interior it was paid up to 361 pesos.
According to the daily report by analyst Andrés Reschini, the free dollar “registers the fastest rise for the first 10 days of January since the last 5 years, a period that includes the year of the last presidential elections.”
With an eye on the polls, Argentine stocks accelerated gains and hit the mark at the start of 2023
The Merval index has already gained more than 50% in dollars in just six months and some papers have even tripled in dollars in that period. The euphoria over local papers contrasts with a negative start to the year on Wall Street
The wholesale dollar rose 25 cents to 180.39 pesos. “There was very little volume traded, USD 160 million, but the important thing is that the Central Bank was able to retain purchases for USD 12 million. It is important that you can accumulate reserves by looking at the coming months, but there is concern about the slowdown in the rate of devaluation that, monthly and comparing it against last month, gives a devaluation of 5%,” added Vitelli.
Reserves, for their part, rose USD 25 million to 43,393 million, but today they will face another payment to the IMF.
The problem is that when markets have so many traps, they start to stumble. For example, it can make the system of allowing foreign tourists to pay for their consumption with MEP dollar cards fail. The gap between the MEP and the free has widened so much (there is a difference of $27 between the two) that everything is as it was before. The tourists talk to the concierge and get the pesos to be sent from the caves at a value of 350 pesos.
Vitelli observed that in November the tourism balance in foreign currency was in deficit by USD 470 million and accumulates a deficit in 11 months of USD 6,396 million, “which is a very important hole in the Central Bank’s reserves. Each tourist who came liquidated just USD 306 in the official market, against the USD 2,506 that an Argentine spends when traveling abroad”. For example, that figure is more than half of what will be lost due to the drought.
Meanwhile, debt bonds had a stable day with some increases that caused the country risk to fall 20 units (-1%) to 2,059 basis points.
Selective profit taking was noted on the stock market. The S&P Merval of the leading shares rose 0.4% in pesos and 0.6% in dollars. The amount of business was significant, $2,967 million, which indicates that those who left the market were immediately replaced.
The ADRs -certificates of shares listed on the New York Stock Exchange- had a mixed round where Ternium stood out with a rise of 4.7 percent.
For today a repositioning of investors is expected. Dollarization continues and the government subsidizes it with interventions, but the enthusiasm for bonds and shares, beyond profit taking, remains firm and this is seen in an unequivocal sign: the amount of daily business.
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