The resignation of the Minister of Economy, Martín Guzmánopens a new front full of uncertainty to a financial market that was already experiencing agitated days with the free dollar at record nominal values, sovereign bonds trying to recover ground following having exceeded 2,500 country risk points and debt in pesos in the middle of a huge unknown.
The feeling that, due to internal policies and the macro environment, the Guzmán cycle was complete is widespread among economists, but it isWith no definition of a successor and with the political struggle within the government coalition red-hot, the scenario does not improve with his departure. Those definitions – name and plan – are the keys for the next few hours.
“For now, Monday is a holiday in the US, which gives a little more margin, but not that much. If someone comes along that the market likes, what comes may be somewhat less traumatic, but there is not much that can be done from a new management”, said the economist Miguel Kiguel from Econviews to Infobae shortly following Guzmán announced that he was stepping aside.
“Entering now is entering to do Remes Lenicov’s, dirty work with little chance of it going well” (Kiguel)
“There are not many options for what you can do: with few reserves, a serious fiscal problem, lack of financing, high inflation, a high gap, the measures you take are going to be traumatic. If you want to go on the expansion side and stimulate activity, you collide with inflation, but if you correct balances you also collide with devaluation and inflation.”, added the former official.
“Entering now is entering to do the [Jorge] Remes Lenicov, dirty work with little chance of it going well,” added Kiguel.
Like Kiguel, other specialists maintain that the name of who replaces the now former minister and what he says are his objectives is very relevant in the coming hours.
“Evidently many people believed that Guzmán’s cycle was completed, I see that he too. The question now is how to fill the void rather than what remains in the past. Not only the person, but also the direction they decide to take”, said the economist Daniel Marx to this medium.
“The opening of the markets on Monday is going to be expectant, at least,” predicted the former official of the presidency of Fernando De la Rúa.
For now, for Marx, Guzmán’s resignation will surely speed up the time in terms of reviewing the agreement with the International Monetary Fund in days in which the agreed goals suffer significant deviations and as an umbrella it is not enough to calm the macro environment.
“The opening of the markets on Monday is going to be expectant, at least” (Marx)
“I think the deal was already under review before he quit because that program was in trouble and difficult to sustain. In that sense, it can be a sincerityMarx concluded.
For now, the days to come in the foreign exchange and debt markets should be hectic. And for worse.
“The question is who is coming and to do what. But even that is an asymmetric scenario. Because there are names that can be a bomb for the market, if the one being replaced is someone from the most radical sector of Kirchnerism. But even if someone more rational were to come, that is not a positive fact because we still have to see what plan he proposes and what political margin he has to implement it,” he said. Gabriel Caamano Ledesma Consulting.
“That’s why, even a positive resolution is still quite complicated in terms of uncertainty”, Caamaño concluded.
The reading that the novelty adds more uncertainty to the market is widespread.
“It is an asymmetric scenario. Because there are names that can be a bomb for the market (…) but even if someone more rational were to come, that is not a positive fact because we still have to see what plan they propose” (Caamaño)
“Beyond Monday is a holiday in the US, the initial reaction would be negative by accentuating the current climate of uncertainty, waiting for the replacement and the respective political signals,” he said. Gustavo Berfinancial analyst.
“The initial reaction would definitely be negative, both in bonds and in shares as well as in financial dollars, since it accentuates the current climate of uncertainty and even the definition of the replacement -and the associated political support- might raise doubts regarding the commitment to advance on the convergence of economic imbalances agreed with the IMF”, he concluded.
Amid the noise over the resignation of the most important minister in the Cabinet, the economist and director of Analytica Ricardo Delgado said that the new economic team is going to have to put together the pieces of a puzzle that is “the exposed fracture in the government coalition.” .
“You will have to have the support of the vice president. It is essential that there is communication and a very clear line of respect for the agreement with the IMF”, considered the economist while emphasizing that whoever takes office “is going to have to define what is done differently from what Guzmán had been doing” .
For the economist Fausto Spotorno, Guzmán’s management was not good despite the fact that it was limited by the pandemic. “Having resigned on a Saturday in these conditions is not so bad because the markets did not open but it would have been better if he resigned and the replacement was ready“, I consider.
Regarding the market’s reaction to this news and what might happen with the bonds and the dollar, he said: “We are going to wait for some definition from the new minister to see how the market reacts. If Guzmán’s replacement has an important weight like Guillermo Nieslen or Martín Redrado, things will turn out better. On the other hand, if we go the other way or worse still, we continue without definitions, we are going to have very busy markets on Monday”, he assured.
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