The market’s views point to the next treatment in Congress of a broad decree that seeks to deregulate the economy and open the market. The initiative of libertarian president Javier Milei was rejected by the senators and must now be debated in the Chamber of Deputies. In this framework, the social situation and the exchange rate gap are two variables that will be taken into account this week.
He International Monetary Fund (IMF) said on Friday that preliminary data suggests that Argentina met program objectives by “significant margins” and added that imbalances persist in its economy and that it is necessary to exercise caution in the elimination of exchange controls.
Analysts give their opinion on the future of Argentina’s economy, at a time when global tensions after recent war attacks between Iran and Israel They create an adverse climate for risky placements.
The “street” and the adjustment of Javier Milei: the view of economists
“Everything the Government is doing (…) does not affect it in political terms because society still has a very strong and very powerful blank check,” said Gustavo Córdoba, director of the Zubán Córdoba consulting firm, in radio statements.
“There was a exchange of expectations for quality of life. The great enemy of the Government at this moment These are the times in which you can seek economic recovery. The big fact is the tension between lowering taxes or recovering income. I think this is where the real discussion is, everything else is a smokescreen,” he said.
“The quotes (of the local financial market) accompany the good financial news, but with the warning of what will happen to the real economy and the external situation”said VatNet Financial Research.
The rally in the markets and the warning of a devaluation
“Most political (and geopolitical) news that provokes a strong market reaction also presents a financial investment opportunity,” Delphos Investment said.
“In Argentina this movement promoted an acceleration of theexchange rate appreciation and greater volatility of securities ‘hard dollar’. However, the good news on the external and fiscal front maintains the market’s optimism, which once again pushed the country’s risk downwards (1,216 points) at the end of the week,” he noted.
“Domestic assets seek to deploy a greater independence and thus recover a better tone in the face of expectation that awaken the presentation of the fiscal package, as well as the positive signals that the last meetings in New York of the economic team with institutional investors showed,” said economist Gustavo Ber.
“Argentine bonds will have a positive trend if the government continues to show fiscal surplus, reserves go up, inflation goes down,” said analyst Salvador Di Stefano.
“Investors discount that, so that Argentina does not become more expensive in dollars in the short term compared to its main trading partner (Brazil), the exchange rate should rise, putting pressure on financial exchange rates“said the consulting firm GMA Capital Eesearch.
“A widening of the exchange gap could be the first manifestation of this uncomfortable situation,” he estimated.
Source: Ambito
