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Dollar, bonds or stocks? What to invest in after the BCRA rate drop

Dollar, bonds or stocks?  What to invest in after the BCRA rate drop

The Consumer Price Index (CPI) recorded an increase of 11% the previous month, against an inflation of 20.6% and 13.2%, respectively, in January and February of this year, from a historical 25.5% in December.

The monetary entity reduced its witness yield to 70% on Thursday, from the previous 80%, which immediately impacted fixed-term bank placements, which average 60% annually.

“The drop in interest rates in a context of growth in credibility and reduction in the perception of risk allowed debt interest payments to be reduced without increasing pressure on parallel exchange rates,” said the Foundation. Freedom and Progress.

“Today there is a growing expectation that fixed terms will beat free dollars; although they do not exceed inflation, which encourages this type of investment,” he noted.

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The interbank peso remained regulated by the BCRA at levels of 867 units per dollar, under a ‘crawling peg‘ (controlled devaluation) of 2% monthly, which creates a rapid exchange rate delay, according to some analysts.

In this context, the alternative exchange places in the face of the current controls operated weakened at 1,062.2 units in the ‘cash with settlement’ (CCL) stock market and 1,004.6 in the so-called MEP dollar.

“The lowering of rates resulted in a decrease in the ‘spread’ between the rate in pesos and the ‘crawling peg’ from around 479 bps (basis points) to 392, so the cost of leverage was reduced for both exporters and importers,” estimated Personal Investment Portfolio.

He estimated that “although this could be counterproductive for the liquidation of exporters in the ‘MULC’ (single market), having greater incentives to delay it, we assume that the Government considered that there was room to reduce this differential within days of beginning the liquidation of the thick harvest”.

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For its part, business in the benchmark marginal or ‘blue’ market was carried out calmly at 1,005 per dollar for sale, with little liquidity.

The Government aims to eliminate the exchange rate and implement a system of currency competition, among other economic measures tied to fiscal control and shrinking of the State.

In the bond market, the main assets dropped 0.9%, after recording a series of increases and accumulating an improvement of 12.5% ​​in March, with a country risk measured by the JP. Morgan bank that It was rising at levels of 1,329 units.

“In the background, the investor appetite for these securities and the rebalancing of portfolios towards those with longer duration remain firm,” said economist Gustavo Ber.

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The S&P Merval stock index fell 1.17% as a provisional close due to selective profit-taking and in line with the trend of external markets due to speculation that the United States Federal Reserve (Fed) will delay a bearish cycle more than expected of interest rates.

For his part, the analyst Salvador Di Stéfano, one of the most listened to gurus in the city of Buenos Aires. He provided the with the lowering of the rate ““The main beneficiaries will be bonds in pesos adjusted for inflation, since it improves the opportunity cost of investing in these securities, since inflation remains high, and the rate is on a downward path.”

“The government is not planning to change its exchange rate policy, so we do not see a rise in the wholesale dollar on the horizon; alternative dollars are still offered and over time they lose purchasing power. It would be healthier to move from liquid dollars to other assets, but in Argentina the love for the dollar conquers everything, dollars are saved despite losing money,” he stated.

And he concluded: “The government does not devalue, no matter how much liters of ink are spilled saying that Argentina is expensive in dollars or the exchange rate is behind. Soon the country could improve its rating, and the agreement with the IMF is closer. than many believe. The scenario is the best for the capital market.

Source: Ambito

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