In the same tune, Banco Supervielle’s papers lead the increases in ADRs on Wall Street, with a rise of 4.2%. It is worth remembering that in the US, Fed officials approached a tightening of their monetary policy in their last meeting in December, which would imply a reduction in their asset holdings and a rate hike earlier than expected.
At the local level, the Central raised the Leliqs’ nominal annual yield (TNA) from 38% to 40%. In effective terms, the annual return (TEA) would be 48.3%, a figure that still seems insufficient to beat inflation, taking into account that the expected price increase for 2022 is 52.1%, according to the latest REM.
Likewise, the entity led by Miguel Ángel Pesce also increased the fixed-term rates, determined the progressive elimination of passive passes to seven days, and created a new 180-day Leliq, with a TNA of 44% and an TEA of 48, 9%.
“This is a very small step on a long road to monetary and financial normalization. Liquidity growth remains extraordinarily high: from a narrow monetary base to higher monetary aggregates such as M3 (which includes public money , demand deposits and time deposits), “said Alberto Ramos, an analyst at Goldman Sachs.
“To a large extent, the monetary authority lost the ability to control internal liquidity due to the need to cover large amounts of fiscal financing via issuance,” he added.
Bonds and country risk
For their part, Argentine bonds sink again this Thursday, given the doubts about the agreement with the IMF. The sovereign securities in dollars that fell the most were the shortest, with losses of 3.6% in the AL29 and 3.2% in the GD29.
In this context, el Country Risk Slashing climbs eight units to 1,796 basis points. The reference does not exceed 1,800 units since the first of last December.
In a meeting with governors at Casa Rosada, the Minister of Economy, Martín Guzmán, revealed on Wednesday that “the fiscal path is the core aspect of the negotiations with the IMF and where until now there is still no agreement.”
From the Government they intend a gradual reduction of the deficit “compatible with the sustainability of the public debt and a redefinition of public spending”, and fundamentally underpinned by the “virtuous” path of economic recovery, to reach a fiscal balance approximately in 2027. Meanwhile, from the multilateral credit organization they intend to cut spending in real terms for the short term.
“The Fund calls for an adjustment policy that the Argentine government is not willing to carry out because it compromises the Argentine people and their ability to grow and develop,” said the presidential spokeswoman, Gabriela Cerruti, at the first press conference of the year. “We hope that it can be resolved as soon as possible (…) Argentina is not going to default,” he added.
The Argentine proposal also raises the need to carry out “a countercyclical fiscal policy to support the ongoing recovery, improve the targeting of the use of State resources, boost capital spending, Education, and Science & Technology, to increase the short-term multipliers and long-term growth and a strengthening of the tax administration that increases progressivity “.
Where there has been an agreement so far with the Fund was on the need to reduce the financing of the deficit with issuance, and to establish various instruments to attack inflation, which include not only lower issuance but also an increase in exports and price agreements to coordinate expectations.
The Government also promised to establish positive real interest rates, a path that seems to have already begun, and to have a real exchange rate consistent with the trade surplus, the accumulation of reserves and the regulation of the financial account.
Source From: Ambito
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