The economist Silvina Batakis replaced Martín Guzmán in the economic portfolio after his untimely resignation over the weekend
“Given the economic and political context, we understand that the stock market decline would not have ceased, without a declining trend still remaining, although with an extremely volatile cyclical behavior”, estimated Roberto Drimer of VaTnet Financial Research.
Externally, investors were awaiting the minutes of the Federal Reserve meeting in June for clues about the health of the economy and the pace of interest rate hikes to combat inflation in the United States.
Country risk and bonds
Argentina’s sovereign bonds renewed record low levels on Wednesday, hit by a persistent offering current in a market without takers given the doubts about the local economic future, at a time when signals from the new Economy Minister, Silvina Batakis, are expected.
Batakis took office on Monday after the untimely resignation of Martín Guzmán, who left the portfolio over the weekend citing strong opposition to his administration.
“Silvina Batakis has a more heterodox profile and faces a market that calls for a more orthodox solution to correct the current imbalances,” said Research for Traders, noting that “the new minister will have to face inflation of more than 70% per year , a high fiscal deficit and a stagnant economy while maintaining dialogue with the International Monetary Fund (IMF)”.
Argentina must meet quarterly goals agreed with the IMF, in the midst of runaway inflation, slowdown in economic activity and exchange pressures that complicate the role of the central bank (BCRA) and the accumulation of reserves, which led to recent restrictions on the import sector .
“In the medium term, the distorted incentives offered by the Argentine economy generate the reappearance of exchange problems and a vicious circle where new restrictions are implemented,” said a report from the association of agricultural entrepreneurs CREA.
Over-the-counter sovereign bonds lost 1.7% on average, after plummeting 3.6% the day before, losing almost 20% since last April.
“These are difficult wheels for Argentine assets. This responds to the expectations generated by the change in the Ministry of Economy and the direction of the measures taken from now on will have to be seen,” said Santiago Abdala of Portfolio Personal Inversiones.
Operators point out that official entities such as the BCRA and the Anses (retirement entity) continue to operate in the bond market to mitigate the collapse of assets.
The country risk index of Argentina It climbed 58 units to a record 2,654 basis points, the highest value since the 2020 debt swap.
Source: Ambito
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