Tuesday , May 11 2021

The government has overcome the key challenge of giving government bills and calming the dollar's surge



U On the large market, the price of the dollar rose from 20 cents to 14 cents from the previous day to $ 35.95. In banks and house exchanges, meanwhile, it rose by 3 cents to $ 37, on average.

It was a relief for everything that was restored to the overall expiration of flights in dollars. 1,350 million dollars were allocated from 4.75% annually to 175 days, ie they are on May 10, 2019, and this is the main attraction of the securities: they are within the limits of risk tolerance and with 125 basic points that the Treasury had to accept a month ago.

But, a certain ingredient appeared, Argentine investors in LETE warned that, if they refuse to restore all property and move to dollars, and remain current in Argentina or out of the country, they would have to pay 0, 75% tax personal assets.

The negative side that had a complete renovation was that part of the investor entered these treasury securities of value with the pesos, but after maturity they did not withdraw the dollars to switch to a certain period. They have been allowed to work for another 6 months to achieve an effective rate of 2,375% in dollars. The decision can be taken as a warning: portfolios are dollarized.

In any case, the rise in the dollar the previous day does not seem to have affected investor confidence. The Central Bank offered Likuditi Letera (Lelik) $ 174.745 million with a reduction rate of 64.01%, which is 1.19 percentage points lower than the previous day. Despite the reduction in the rate, it has attracted nearly $ 5,000 million through maturity.

The world helped to make this happen. When it became known that in October the inflation in October was in line with what was forecast by analysts -0.2% – sentiment eased and the dollar weakened against almost all the world currencies. In fact, in Brazil, the dollar lost 1.3% versus real and in Chile, 1.44%.

The In the meantime, US Treasury bonds have risen in price and its performance fell to 3.12% annually. Since Argentine bonds continued to lose parity, Argentina's risk index rose from 1.41% to 646 points.

Sustainable low reserves

Reserves fell $ 95 million to $ 52.831 million despite the fact that abroad the rise of gold and the euro has earned $ 29 million.

Payments abroad were $ 24 million to international organizations and 1 million for Brazil. The decline in reserves is due to the movement of deposits in dollars that cause banks to withdraw money from their minimum cash account in the Central Bank.

The stock market has been fueled by international circumstances. The most abundant is the increase of 1% of oil to $ 56.25 per barrel after losing 25% of its value since the first days of October.

Index Merval Leading Shares Increased by 2.90% with a regular business value of $ 524 million.

Even though they are favorites of the oil company, a great incentive for the growth of the stock market comes from the hands of financial institutions. Banco Supervielle 4.95% and Macro 4.76% were among the most important.

However, the biggest increase was Pampa Energia, 6.33%, after the first two points fall in the week.

In Vall Street Argentina's ADRs – holding certificates in dollar quotes – had a good day. Increases have far exceeded drops. Edenor surprised 10.32% of all, despite the fact that during the year he accumulated a 50% drop in dollars.

The situation was positive for the Government. He won one of the heaviest tests ever since the monetary clause was in force since October 1st.

He still has the room to lower the rate he pays for Lelik. You can not put it below 60% per year until there are certain signs that inflation is diminishing.

It will also be necessary to see if he will continue to play to have him in the lower limit of the band. It is a risk that has taken place because the market has shown its sensitivity and the dollar will soon take a bigger step with the slightest drop.

But this was one of the challenges that will come by the end of the year. December is the most unfavorable month for Argentina, because it is traditionally when savers and investors are buying more dollars.

It is necessary to remember that the big crisis was caught by the government in December 2017, when the exchange of backlogs exploded.


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