The tensions within the global banking system, which began with the bankruptcy of the US Silicon Valley Bank, complicate the complex economic situation in Argentina in a year marked by presidential elections.
Analysts are of the opinion after the Government announced a bond exchange to which official entities must adhere to deliver dollarized titles in exchange for other pesificados.
The scant reserves of the central bank (BCRA), high inflation, which exceeds 100% year-on-year, and a high deficit in public accounts are issues that worry investors.
The recent exchange of dollarized bonds “is not a beneficial measure or a disaster that leads us to the abyss,” the economist said in radio statements Rodolfo Santangelo and pointed out that “with this measure you can lower the (exchange rate) gap, but for a few days. Here the issue is not who sells the bonds, the issue is who buys it. The problem of the capital market is demand, not supply” .
“The impact of the measure in the short term was not welcome. In bonds payable in foreign currency maturing in 2030, the price fall was greater than 4%, while the prices of financial dollars fell close to 3%, due to the expectation of greater selling pressure,” said the consultancy EcoGo.
For his part, Diego Ferroan economist at M2M Capital, estimated that “the measure is indefensible from any point of view” and pointed out that “it improves marginally in the short term and worsens everything in the medium term. The only objective of this government is to get to the elections alive and this in the fund can help.”
“The BCRA continues to lose reserves in the exchange market, accumulating almost 1.5 billion dollars in net sales in March. Thus, a new twist to the stocks (restrictions) is to be expected, giving this more impetus to financial dollars,” estimated Roberto Geretto, of Fundcorp.
“The situation of the local market would become very tight before the succession of short-term measures, whose horizon is limited to the short term given the economic context and the political situation,” estimated VatNet Financial Research.
“Only as a conjecture, the Government could be sowing seeds for an eventual exchange rate unfolding, within the package of measures that have just been announced,” he estimated. Jorge Vasconcelosof the Mediterranean Foundation.
“The numbers indicate that the economy (of Argentina) already began to slow down sharply at the end of 2022 and in 2023 the stagflation scenario is consolidated, aggravated by the impact of the drought (at least 20,000 million dollars of fall in exports ) and inflation exceeding the 6% monthly average,” said clearing and settlement broker Cohen.
“The BCRA continues to sell in the exchange market without having yet provided any modification in the exchange scheme -read, more stocks- that allows it to extend the agony first until the PASO (primary) elections in August and then until the presidential replacement in December “said Portfolio Personal Inversiones.
“Comparing current Rofex (futures) rates with inflation and the policy rate, we believe rates may continue to rise in the near term if they continue on an overshooting path as discouraging data continues to emerge.” Delphos Investment said.
“However, if the economic team manages to tame the macro, these implicit rates look high but the current uncertainty and potential bad inflation data for March leads to prudence dominating the scene,” he said.
Source: Ambito
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