This is Adcap Financial Group. Despite the bets that the futures market reflects, he assures that the ruling party will avoid the disruptive movement in the electoral context.
The possibility that the government can avoid a devaluation jump and a reprofiling of debt maturities in pesos will depend more and more on both the ruling party and the opposition being able to reassure the internal ones in the middle of the electoral dispute, agree market analysts. It happens that the assets have implicit in their prices a disruptive event in the coming months. One of the measures is future dollar to November that is located at $490.
According to a report by Adcap Grupo Financiero, the market seems to read that after the Simultaneous and Mandatory Open Primaries (PASO) in August “a scenario similar to that of 2019 may occur.” At that time, the government of Mauricio Macri had applied an important adjustment in the framework of a Stand By with the International Monetary Fund. When the elections marked an unfavorable result for the ruling party at that time, the run against the peso accelerated, which led to the Minister of Economy, Hernan Lacunzato replace the dollar stocks already postpone for a few months the maturity of some Treasury bills which expired in December.
“However, that reading seems to be much more associated with fear and the market is covering itself in something similar, although it is very unlikely that it will happen again the same scenario,” he says. ad cap. The fund manager’s proposal is that the PASO are not going to define the new president, and neither will the general election. In other words, the new government will define itself in a second round in november. In this sense, he deduces that “It is unlikely that the Frente de Todos, being still in charge of the Government and assuming that it is looking for a good result at the national level and in the province of Buenos Aires, make a devaluation jump or a reprofiling of the debt”.
Thus, the entity that has Javier Timerman as a founding partner points out that “this type of stress is unlikely to be repeated” as in 2019. After the exchange rate shock that came to put financial dollars close to $500, the government began to take new measures to control the gap and managed to calm tensions. After the announcements (intervention with reservations, rate hikes and CNV restrictions), Cash with Liquidation and MEP parked at around $430 and they stayed there, although nothing guarantees that it is only a battle won in the framework of a war that does not end.
The risk rating agency Moody’s it also warns about the need to order politics. In his latest report on social risks in Latin America, he assures that in Argentina “the frequent political noise of internal struggles and the poor coordination of economic policy between the branches of government hinder confidence for business.” The agency notes that “noise linked to the October presidential election adds uncertainty to politics in 2023”.
On the other hand, Gustavo Reyes, chief economist of the Cuyo Regional of the Institute of Studies for Argentine and Latin American Reality (IERAL), states that there are still doubts to clear ahead. Reyes maintains that the possibility of the economy entering a field of accelerated inflation “depends on political factors such as the change of the Minister of Economy, a break with the IMF, that there is a greater power vacuum, or that they eventually run out of power.” Dollars”. The IERAL economist warned in a talk that “in no crisis do reserves reach zero, since they explode earlier when the authorities see that the dynamics can lead to running out of dollars and then they close to keep something.” That is why he suggests “monitoring the result of the trade balance, the outflow of dollar deposits from banks and whether the IMF is going to give Argentina fresh funds.”
Source: Ambito
