The huge doses of uncertainty are likely to continue for the next few days.
Two ideas to take the pulse of the latent financial moment. But first, an endangered species, a two-headed critique of that animal that usually sniffs out vicissitudes, the well-known Dal Pogetto-Alvarez Agis. This specimen has manifested itself in the last few hours. It indicates that it is necessary to avoid “exchange rate lag”that the scheme of transferring debt from the BCRA to the Treasury “it doesn’t change too much” will not save tensions, that the 2% monthly crawling peg is not enough and that the primary surplus is “a necessary but not sufficient condition.” Last but not least, that dollars are love and not good reasons.
On the one hand, the huge doses of uncertainty: they are likely to extend over the next few days. The reason must be sought in the exchange proposed by the Government to the banks, the transfer of the repos and the negotiation for the well-known “puts”. This is an argument to try to understand the generalized falls that have been tied in the last hours, shares and bonds that lost value in light of the decision of the investors, who prefer to get out of their bets until further notice.
For the same reason, and for someone who has been following the dynamics of the rise of the financial dollar in recent weeks, the economic team, which seemed to score its first victory – the term is excessive – now foresees a certain stagnation. Although it is true that the quotations deflated in the heat of speculation, the game is long, they say.
The blue dollar fell to the $1,400 zone and the MEP dollar dropped to approximately $1,300. But the battle is being fought over the CCL dollar, because the Government’s objective has changed. Now there is talk of narrowing the gap, bringing it into the 20% zone. Why would the Government want to return to that area at a very high cost for the financial program? Let the reader work on speculation, when the friendly fire of the Treasury reminds the minister Luis Caputo their mistake in not having unified the exchange rate a few months ago when that gap was -including the exchange rate controls- at that same distance.
However, the second idea, in addition to the supposed “victory” of the Government, is What will happen to the level of reserves and the impact on its relationship with the IMF?. The most important detail is the rise in country risk, that is, the perception of the risk that Argentina faces of not being able to pay its debt. The announcement, of a currency and monetary nature, over the weekend about the transfer of the repo that the BCRA has with the banks to the Treasury’s Liquidity Financial Letters (LeFi), spread the idea that the dollars that the monetary authority will buy for exports will be offered in cash with settlement. In fact, will buy at $920 at the official exchange rate and sell them at the CCL dollar. The same with the famous “purée”, buying at the MEP dollar and selling at the blue dollar, which some followers of the Casa Rosada predict will be successful.
Resuming the argument, the Government’s announcement comes precisely when the only precise chance that the minister has Luis Caputo The problem of adding reserves has shown problems. Net reserves are negative by more than US$ 5 billion according to the IMF’s measurement and the relationship between the organization and the Government is more arid than ever, with Gita Gopinah giving lessons in morality and leadership using a photo of the National Team carrying the Copa America. Does the Messi of finance need advice from the IMF?
Source: Ambito
