2023-07-31 12:19:17
The Central Bank of the Argentine Republic is undercapitalizedwithout an increase in reserves, the weakness of the peso is manifest, more inflation and rise in alternative dollars.
Did the Federal Reserve once once more raise the interest rate?
The short-term rate is 5.5% per year, when inflation stands at 3.0% per year in the United States, This implies a positive interest rate, which sooner rather than later it will impact economic activity. Banks cannot pay such an interest rate, the average pays 4.5% per year, which is the rate of return of the 3-year American treasury bond.
The Central Bank bought 300 million dollars and closed its best week of the year
Rate in Europe?
The European Central Bank raised the rate to 4.25% per year, it cannot be left behind so as not to devalue the euro.
However, do emerging currencies appreciate?
Is incredible Brazil. The real is worth 4.73 per dollar, linterannual inflation is at 3.2%, and the interest rate is 13.75% per year. Brazil’s growth expectation is moderate, but shows a very solid indicator.
Argentina and the IMF in a very particular relationship?
When Mauricio Macri got US$47,000 million from the IMF, many they spoke of collusion with the United States to obtain such financing. Currentlyanother unprecedented event occurs, the IMF is refinancing the government’s debt, helping it to get funds and signing a very soft agreement so that it can comply.
The IMF is peronist
It was also said that he was from the Pro when he lent him US$ 47,000 million.
So?
The IMF was imprisoned by Argentina, made the most important loan in history, now it is carrying out the greatest flexibility in history so that Argentina can pay and continue with the hope of recovering the investment.
How are the special dollars
I believe that applying taxes to the dollars that are used to import is a serious mistake, because they make imports more expensive and there is no possible coverage via the futures markets. The special dollars for exports also generate asymmetries, in terms of prices and money. It is a monstrosity that will generate many distortions of relative prices and inflation.
Can you explain them better?
. – The corn dollar generated an increase in the price of corn, this affects the costs of activities with added value such as livestock, dairy and eggs. On the other hand, the prize is so great that the actors liquidate everything they have, and in the future we will run out of corn for the domestic market. In monetary matters, the Central Bank must issue more pesos at the time of exporting the products reached by a special exchange rate, this deteriorates the balance of the Central Bank.
Any additional harmful effects?
. – For example, various programs were carried out with the soybean dollar at a higher exchange rate than the prevailing market rate. The liquidation was so great that today there is no soybean in the internal market to produce food for consumption, this problem is going to be seen with a general rise in prices of meat, milk, eggs and other products.
The increase in costs does not imply an increase in prices
. – Correct, prices are formed in the market, but if you don’t have soybeans, animal fattening will be slower, less supply will reach the market and if demand is constant, prices will arbitrate upwards.
What happened to the price of the standing farm?
. – Every week 25,000 animals arrived at the Cañuelas agricultural and livestock market, this week 21,000 animals arrived, and next week even fewer would be expected. This is because the drought is easing, there is more grass on the prairie, and the producers prefer to retain livestock. During the year there was a large liquidation that might not be sustained over time.
Inflation: the Central Bank hides its report
How much did the estate increase in the year?
. – In the last 12 months it rose 68.3% versus inflation of 115% per year, this implies that the farm price is still recovering what it lost, it is not an increase above inflation.
Could you keep going up?
. – Correct, and allow a rise in pork, poultry and other meats.
Will inflation in July be high?
. – By no means, these increases are going to materialize during the month of August, with which the news will arrive on Thursday, September 14.
Will the BCRA increase the interest rate?
. – For now there is no need, the nominal fixed term rate is 97% per year, and the effective rate is 154.6% per year, there is no need to raise rates.
How do you stop inflation?
. – Capitalizing the Central Bank of the Argentine Republic.
How would it be done?
. – Raising the reserves in a genuine way or lowering the amount of pesos.
With more exports or credits?
. – In neither of the two ways, when you take a loan, dollars enter the asset and obligations in the liability. When export dollars enter, you have to issue the pesos to the exporter.
So?
. – To capitalize the Central Bank you have to have a fiscal surplus and with those pesos buy dollars to genuinely increase reserves. You can also capitalize the Central Bank by selling State assets and placing them in the Central Bank’s reserves.
Is that not going to happen with this government?
. – Inflation will not go down with this government
It probably won’t happen with the next one either.
. – Then the inflation will not go down with the next one.
No exit
. – The only way out is the fiscal order, there is not much science.
So I buy dollars?
. – You can buy dollars, buy sovereign bonds, negotiable obligations that pay amortization and rent in MEP dollars, negotiable obligations that adjust for linked dollars (wholesale) or shares.
Any company to recommend?
. – A company that is listed on the stock market will make a strong investment this week, and it will be the cover of all the newspapers.
Which?
. – Not everything is free, I leave it to you for the private report.
How do you see the American stock market?
. – Very well, banks and technology are among my preferences, it seems to me that they are going to cause people to talk.
What comes following the Paso on August 13?
. – We are developing this in the conferences that we are giving throughout the Argentine Republic, in recent weeks we were in San Carlos, Córdoba Capital, Monte Maíz and in Rural de Palermo, this week in Rosario, Leones, Pehuajó and Lincoln.
How do you see alternative dollars?
. – According to the Central Bank’s own numbers, monetary liabilities total $23.2 trillion, and reserves U$S 25,210 million as of July 23, this gives us a conversion dollar of $920. With alternative dollars between $510 and $550, it would give the impression that there is still a long way to go.
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