© Archyde.com/AGUSTIN MARCARIAN
FILE IMAGE. 100 Argentine peso bills below a $100 bill in this illustration taken on September 3, 2019.
BUENOS AIRES, April 5 (Archyde.com) – Argentina’s bonds and shares closed lower on Tuesday due to profit-taking in line with investors’ doubts in the face of rising inflation that overshadows a recent agreement with the International Monetary Fund (IMF) to refinance some 44,000 million dollars.
“The internal political scenario continues to raise concerns as a result of the continuous tensions in the ruling coalition, since the short circuits might become a serious conditioning factor for the management of the Government and the implementation of the goals agreed with the IMF, even more so as the electoral calendar of 2023 is approaching,” said Gustavo Ber of Estudio Ber.
Reducing inflation, shrinking the fiscal deficit, raising interest rates and cutting energy subsidies are key demands of the agreement with the credit institution.
Operators said that the assets linked to the dollar are used as a hedge once morest a consumer price index (CPI) that by March might shoot up to 6%, a fact that bothers following the costly guarantee to close those of the IMF.
“March inflation would be around 6%, it would be the highest monthly inflation since September 2018 when it had reached 6.5%,” analyst Christian Buteler emphasized.
The Government will release the CPI for the third month of 2022 on Wednesday of next week, with which the first quarter of the year will close with a drag of at least between 11 and 12%, according to projections by private analysts.
* Over-the-counter sovereign bonds averaged a 0.6% decline, following accumulating an improvement of 3.8% in the last seven trading sessions.
* “Investors remain attentive to the development of the domestic economy, the evolution of retail inflation, and how Argentina will be able to meet the fiscal goals of the recently approved agreement with the IMF,” said Research for Traders.
* The Argentine country risk of the JP. Morgan bank rose 18 units, to 1,710 basis points towards the close of the local market (2000 GMT), following marking the day before its lowest level since mid-December.
* The S&P Merval stock index lost 1.51%, to a provisional close of 91,814.30 points, compared to an increase of 3.6% accumulated in the previous four rounds.
* In the exchange market, the wholesale peso ended with a drop of 0.10%, to 111.69/111.71 per dollar under the permanent control of the central bank (BCRA) with purchases or sales of foreign currency from its reserves.
* The “BCRA ended its participation today (Tuesday) with purchases for 15 million dollars,” said Gustavo Quintana of PR Corredores de Cambio, adding that “in the first days of April the monetary authority accumulated purchases for 9.5 million “.
* The reserves of the monetary authority benefited from the arrival of more than 6,000 million dollars following the agreement with the IMF, which helped to partially remove recent exchange rate pressures.
* The Argentine currency in the alternative segments traded at 190.4 units in the “counted with liquidation” (CCL) stock market and at 191 in the so-called “MEP dollar”. Businesses in the informal or “blue” strip were agreed at 196 per dollar, its highest price in almost three months.
* The main global markets remained bidders given the prospect of new sanctions on Russia following the invasion of Ukraine.
* “Latin America has little direct economic and financial relationship with Russia and Ukraine; however, the increase in energy prices and the new wave of supply shocks restrict access to agricultural and industrial commodities, which generates higher inflation and probability of a prolongation of monetary policy tightening,” Moody’s Investors Service said.
(Reporting by Walter Bianchi; collaboration by Hernán Nessi; Editing by Jorge Otaola)
