The tip of the iceberg Dollar-tales-aencos Javier Milei himself pointed out last Friday, in the Rosario Stock Exchange. There, and when the intensity of the looks anchored all in their figure for the filtration of the audios of the former andis, Diego Spagnuolo, the president looked at the auditorium and assured that he was willing to do what he was with such “Turn off pre -election volatility”.
In a context of High political voltagethe government faces a critical week, also, financial. With the country risk at 753 basic points, the distrust of investors persists. The fact to take into account was leaked by the Treasury Palace during the weekend who would like to pay attention. In the bidding of debt in pesos scheduled for this week, with maturities for $ 13.7 billion – of which $ 9.1 billion are in private hands -, The Executive is willing to implement a new rise of bank lace and, therefore, of interest rates of being necessary.
This maneuver, which adds to hardened lace regulations, seeks to absorb excess liquidity and avoid exchange leap that could aggravate the trusted crisis, less than two months after the legislative elections of October 2025.
The scandal for coimas and the risk premium
Audio leaks attributed to Diego Spagnuolo who accused Karina Milei and Eduardo Lule Menem of receiving bribes from pharmaceutical companies seem to continue horating confidence in the government. A judicial investigation with raids and the alleged dissemination speculation of new audios and videos for this week, adds drama to the context. The scandal has weakened Milei’s anti -corruption narrative and promises to add pressure to the exchange rate in the financial front and even in the electoral variant.
The failed tender of the last days where the treasure only renewed 61% of the 15 billion pesos in maturities, injected 6 billion into the market, equivalent to one third of the monetary base. This excess of liquidity shot fears of a run to the dollar, fears that did not dissipate last week with the official dollar closing to $ 1,337 for sale. It is known that, in response, the Central Bank (BCRA) acted quickly: last Monday, it had an exclusive bond placement for banks, awarding $ 3.8 billion, and raised bank lace from 45% to 50%, with daily measurement. Last Friday, a new regulation marginally modified this, although it maintained demands for financial entities and limitations to their ability to operate with excess pesos.
These measures They were not enough to calm the pressure on the weightand market sources look carefully at what could opt in a new rise rise this week, accompanied by an adjustment in the fees. As stated, the tender this week, with $ 13.7 billion pesos in maturities, presents an additional challenge: 9.1 billion are in private hands, which complicates the renewal of the debt. “Private holders are more sensitive to political risk; The Spagnuolo scandal and the country risk at 753 basic points make them more reluctant to reinvest, ”explained a market analyst.
The government’s strategy pursues two objectives: Maintain the exchange rate within the flotation band (970-1.450) and guarantee the success of the tender to avoid a new liquidity shock. In his speech on the 141st anniversary of the Rosario Stock Exchange, Milei was emphatic: “It’s time to make rate”. The president of the BCRA, Santiago BausiliI had advanced in the “damn” program that the divergent band scheme is transitory, feeding speculation about a change towards October.
Risks and tensions of the financial system
The new lace regulations that consolidated the daily measurement and increased the demands, It generated tensions in the financial system. “Banks face an operational bottleneck; Daily lace are a headache, ”said an operator. Creditconsequence of record rates, could slow down economic recovery, projected at 5.5% by 2025 by the World Bank. The delinquency of personal loans (6.5%) and credit cards (4.9%) in June reflects a deterioration in the ability to pay families, which could be aggravated with higher rates.
“Private investors demand greater yields to compensate for political risk; The Treasury could have to validate even higher rates, ”explained an analyst. Operators warn that a new stumble in the tender could shoot the blue dollar, projected projected at $ 1,535 for December, according to the Rofex market. This could force the BCRA to intervene directly in the exchange market, contradicting Milei’s free market speech.
The government faces a precarious balance. The rise and rates rise, added to the AD-Hoc regulations that are constantly elaboration, seeks to stabilize the exchange rate and inflation. However, the economic and political cost is high. Liquidity compression could alienate productive and financial sectors, while the Spagnuolo scandal erodes the credibility of the ruling at a key moment before the elections. Inflation, which in July marked 1.9% monthly, shows resistance signs in sectors such as services.
A success would reinforce the executive’s strategy, but a new failure could trigger a exchange rate and force more drastic measures, such as a direct intervention of the BCRA on the ceiling of the exchange band, something that the government wants to avoid. Market sources agree that Milei is committed to winning time until October, when the legislative elections will define political support for their reforms. However, the economic perspective has become more cautious: market analysts such as JP Morgan have reviewed growth projections by 2025, reducing them from 5.3% to 4.7% of GDP, citing the economic deceleration of the second quarter, the volatility of the fees, and electoral uncertainty as key factors.
Source: Ambito
