The free dollar ended trading this Friday at $211 for sale in the small informal market. In the week, the “blue” dollar fell 4.50 pesos or 2.1%, while maintaining an increase of four pesos or 1.9% in the short course of 2022.
With the declining trend, the free dollar It remains at 11.50 pesos or 5.4% of the record of $222.50 on January 27, a movement that is in line with the decline in stock parities, which recorded five bearish sessions.
The dollars traded on the Stock Exchange experienced falls in all five wheels, at $206.74 for the “cash with liquidation” (-4.4% weekly) through the Global 2030 (GD30C), and $201.20 for the MEP dollar (-3% weekly) with the Bonar 2030 (AL30D).
The setback was justified by the expectation of a monetary tightening by the Central Bank, which materialized with the announcement of a rise in reference rates made on Thursday.
Argentine stocks record their highest dollar prices in three months, while Global bonds rebound 10% in February
In a movement that had already been anticipated by market agents, the Central Bank increased rates between 250 and 300 basis points reference of its Liquidity Letters (Leliq), to comply with the commitment assumed with the International Monetary Fund (IMF) to offer positive real rates, that is, above inflation.
Thus, the reference rates rose from 40% nominal annual to a range of 42.5% to 47% nominal for the Leliq that places banks. In the same sense, due to the transmission of yields that this increase produces in the financial system, increased from 39% to 41.5% annual nominal Guaranteed minimum yields for fixed-term deposits to 30 or more days -in the case of human persons-, and to 39.5% in the case of deposits of legal persons.
In a context in which the BCRA went 13 consecutive days without selling foreign currency on a net basis, in the segment wholesaler of the dollar, the currency ended $106,78 per unit, regarding 63 cents or 0.6% above the values of the previous Friday.
So far this year, the official exchange rate has advanced 4%, while the exchange rate gap with the free dollar now stands at 97.6 percent.
The exchange rate gap was reduced to less than 100 percent for the first time in the yearbecause this had not happened since last December 28.
More profitable rates in pesos are always competition for the dollar. The falls for the alternative parities that had been observed in the past three weeks were linked to the proximity of an agreement with the Fund, but also to the forecast of the return of the “carry trade”with gains for placements in pesos that in the short term will take advantage of the expected devaluation.
Auspicious recovery in the stock market
The sovereign titles in dollars closed with important rises weekly, in a market that keeps its eyes on what might happen in the National Congress when the agreement between Argentina and the IMF to renegotiate the debt contracted in 2018 with the agency itself.
The Global in dollars -with foreign law- accumulated a 4% average profit on five wheels, which extends to a 10% in the course of February.
Meanwhile, the risk country of JP Morgan fell more than 80 units compared to Friday the 11th, in the 1,730 points basic, at a minimum since February 2.
The main catalyst continued to pass through the political signals in favor of the bill on the agreement with the IMFwhich will be sent to Congress following the opening of ordinary sessions in 2022, with March 2 being the date stipulated for this purpose.
“We recall that a primary fiscal deficit of 2.5% of GDP is projected for 2022, -1.9% for 2023, while for 2024, -0.9 percent. In terms of money, it is pointed out that this year the financing will be 1% of GDP, in 2023 around 0.6% and in 2024 it will be close to 0%”, pointed out the analysts of Research for Traders.
Fernando ZiadeManaging Director of Adcap Grupo Financiero, stated that “this year, the continuity of the exchange delay is ruled out, and with the Central Bank going to positive real rates, it is expected that this year will end up being much more even”.
“Last year, due to the exchange delay, the performance of the bonds was very uneven, and although there was some volatility when the market started looking for ‘pricear’ (translate to prices) risk of an exchange jump post-election, inflation-linked bonds ended up yielding regarding 25% more than bonds dollar linked. Something similar happened with the Badlar rate”, Fernando Ziade specified.
At $211 for sale, the free dollar fell to its lowest price in a month
“In a context of rate hike of the BCRA, the market assigns value to variable-rate assets over fixed-rate assets. For this reason, in recent weeks they have strongly compressed the assets tied to the Badlar rate – sovereign, sub-sovereign and corporate -, since the market is re-demanding in particular shorter bondswith durations close to a year”, added the Adcap expert.
The local stock market got circumvent the strong bearish influence that spread on Wall Street (-1.5% for the Nasdaq and the Dow Jones) and accompanied sovereign bonds, also with investors’ eyes on the evolution of implicit exchange ratesgeopolitical tensions, as well as in principle agreement with the IMF.
the leading panel S&P Merval of the Buenos Aires Stock Exchange reached 90,000 points, a threshold that had been lost on February 2. During the week, it rose 1.4% in pesos, to 89,443 units, and 3.9% in dollars, due to the drop in the exchange rate implicit in the ADRs. The Merval in dollars reached the highest in three months, since November 15 from last year.
The panel of leading shares of the Buenos Aires square accumulates an advance in pesos of 7.1% so far this year, compared to an inflation of 3.9% registered in January. In addition, the leading panel moved to gains of 4.4% in dollars in 2022in the 429.7 points measured by the “cash with settlement” implicit in the ADRs operated on Wall Street.
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