The Argentine market is rearranging itself in the face of the global uproar caused by the Russian invasion of Ukrainian soil, which triggered raw material prices and opened up a complex geopolitical panorama between world powers.
“Russian forces are advancing towards Ukraine and world markets are collapsing,” summarized the Portfolio Personal Investments (PPI) brokerage.
A global wave of risk aversion spread after Russian President Vladimir Putin ordered a large-scale invasion of Ukraine in Argentina early this morning, risking severe economic sanctions from the West.
ActivTrades analyst Alexander Londoño stated that “the dollar has been one of the safe haven instruments preferred by investors around the world in these times of uncertainty due to the conflict in Ukraine. The greenback is strengthening against its main counterparts and against the currencies of emerging markets. However, it has been against the euro that it has left on the ground because the conflict in Ukraine could slow down the economy in the old continent”.
In relation to the local context, the economist Gustavo Ber stated that “the Operators once again worry about draining reserves after a stage of greater stability in interventionsbeyond the positive reception to the more accelerated ‘crawling-peg’ and rate hikes”.
He added: “in the face of external noise, and pending the closing and parliamentary approval of the agreement with the IMF, financial dollars intersperse a respite after recently deflating with the MEP reaching $200 as a result of greater arbitrations of the operators in favor of the ‘carry-trade'”.
On the black market, the Blue dollar rose 50 cents to $210.50 after hitting its lowest value in five weeks, according to a survey carried out by Ámbito in the Foreign Exchange Black Market. Consequently, the spread between the blue dollar and the wholesale exchange rate stands at 96%.
The prices of the alternative exchange rates reached a maximum level of $233 (CCL) on January 27, the day before the announcement of an understanding with the IMF for the debt and the payment of a due date with the organization.
Since then, the exchange rate gap had narrowed almost 35 points, going from 122% to the current 88%, with additional help provided by the price of agricultural commodities, the acceleration of the crawling-peg in the official dollar, and the recent rate hike arranged by the BCRA.
official dollar
The dollar today -without taxes- rose six cents to $112.89 this Thursday, February 24, 2022, according to the average in the main banks of the financial system. In turn, the retail value of the currency at Banco Nación remained unchanged at $112.50.
The wholesale dollar, which is directly regulated by the BCRA, rose 10 cents to $107.38with a somewhat broader tour than in previous days, always hand in hand with official activity in the sector where banks and companies operate.
The Central Bank (BCRA) sold reserves for the fourth consecutive day, ending with a negative result of some US$60 million. The monetary authority sold more than US$180 million since Monday, and began to accumulate a negative balance of some US$20 million in February.
Highs were posted early on at $107.44, sixteen cents higher than the previous end. The authorized demand maintained the pressure on the price of the dollar, holding them at the initial values until the appearance of the Central Bank in the market corrected the initial rise. Official sales responded to purchase orders without a genuine offer counterpart and generated declines with prices taking them to lows of $107.37, close to the end of the day.
With only one wheel left to finish this week, the wholesale exchange rate accumulates increases of 60 cents, about to exceed the 63-cent increase registered in the previous week.
The end of the month, which occurs this Friday, impacts the demand for foreign currency, which is increased by the need to cover positions that must be settled on that date.
Source: Ambito
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