The calm of the financial dollars was short-lived. Despite the fact that they went through two consecutive rounds of decline, after the Ministry of Economy announced the repurchase of Argentina’s foreign debt -a measure that allows it to intervene on free and legal quotes-, today both the MEP dollar and the dollar counted with settlement (CCL) open the day with increases of up to $13.
In the last round of the weekthe stock dollar (MEP) is traded in the capital market at $346.19, a daily advance of more than $13 (+4%). This bullish trend comes after having dropped $7 during the previous day.
Meanwhile, the dollar cash with settlement (CCL) appears on screens at $364.60. They are $9.20 more than during the close on Thursday (+2.6%). The price also arises from the purchase and sale of sovereign bonds, and allows US bills to be transferred to a bank account outside of Argentina.
“Debt reduction will pay off in the long term. However, the operation has two immediate objectives: deepen the drop in country risk and contain/moderate the financial exchange rate gap. For the MEP and CCL exchange rates to fall, the titles that are quoted in both currencies should become more expensive in dollars than in pesos. This would be boosted by the purchase of bonds with dollars by the State and the increase in the rate of passive repos that the BCRA implemented simultaneously,” they explained from the economic consultancy Equilibra. Today, the Government’s “firepower” will be put to the test towards the end of the wheel.
However, the blue dollar leads its third consecutive decline. This Friday, in the streets of the City Buenos Aires, the little trees offer the informal exchange rate at $373, one peso less than the previous day (-0.3%). Even so, during the week it continues to be $4 up and is among the highest values on record.
“The Central Bank continues issuing currency that is not demanded by the public, even with the help of the seasonal demand for pesos, and this results in an increase in remunerated liabilities that already exceed 12% of GDP; historical maximum levels that are sustainable only if the demand for pesos stabilizes. The rise in the free exchange rate does not help for this and the still high inflation expectations do not suggest a recovery in the demand for real balances either”, they pointed out from LCG.
While, the official wholesale exchange rate is at $183.44, which means a microdevaluation of 33 cents (+0.2%). When contrasted with the blue dollar, the gap between the two prices continues to be above 103%.
Regarding the bonds from the last debt exchange, Profit taking continues for the second round in a row. Especially the global ones with short maturities, to which Sergio Massa referred during the announcement on Wednesday. Thus, abroad, Global 2029 falls 3.19%, and Global 2030, 2.38%.
Despite the drop in sovereign debt securities, country risk it gave up ten units, up to 1928 basis points (-0.5%). It should be remembered that yesterday the index prepared by JP Morgan yesterday jumped 130 points and erased a large part of the loss of the previous days.
Focusing on the Argentine stock market, today the S&P Merval resumes the upward trend after having presented the highest daily drop on Wednesday since the arrival of the covid-19 pandemic in 2020. This Friday it stands at 244,102 units, 3.8% more than yesterday. The papers of YPF (+6.1%), Banco Supervielle (+4.2%) and BBVA (+3.3%) stand out.
“The behavior of the actions, that influence the country’s nominal stability by strengthening the demand for domestic assets, it is bullish, even when comparable countries do not show the same trend. We then see a local factor, management, associated with this rally. The increase in the monetary policy interest rate and the fiscal adjustment were well received by the markets; something that was confirmed over the months”, they observed from the economic consultancy Analytica.
The numbers in green are also seen among Argentine shares listed on the New York Stock Exchange, better known as ADRs. YPF papers climb 4.9%followed by Banco Supervielle (+4.2%) and Despegar (+3.4%).
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