2023-12-15 17:32:00
LJavier Milei’s first week in governmentor it started with a “virtual exchange holiday” defined by the BCRA, while awaiting the economic announcements that the government would make. The markets remained calm on Tuesday, especially dollars, which registered almost no operations, although bonds began to show a recovery. By Wednesday, with the 118% devaluation of the peso and the other 9 measures promoted by Luis Caputo, more marked movements began to be evident. During the first hours, financial dollars, especially Cash with Settlement, jumped and the parallel climbed to $1,150. However, by Thursday, it isThe quotes deflated below $1000, and the officer continued at the new value of $820.
There is consensus among the analysts consulted by PERFIL that The market supported Javier Mielei’s definitions in this first week in governmentalthough for people it implies a very difficult adjustment that they have already begun to feel in their pockets with increases in the 37% in fuel, 50% in meat and in the midst of a climate of rising prices and speculation.
Luis Caputo’s 10 measures: what economists think regarding the “emergency package”
But, returning to the markets, Lentini noted that “In the financial world as in the majority of society we are ending a first week with a good reception of this new governmentbeyond the measures that have been taken to deregulate the entire set of regulations that have existed up to this point,” he commented.
According to the financial analyst in the government, they have to be very careful, because what they are dismantling is “a construction of patches upon patches.” In this scenario, “andThe market is seeing the deconstruction of this set of restrictionsin addition to taking the dollar to $800,” he commented.
When analyzing the US currency, he showed his positive view: “Today’s 800 dollar is equivalent to the dollar at the beginning of 2002, which we later saw fell, and this is the famous overshooting expected by some analysts that has to do with giving the government air for the coming months,” he commented. Along these lines he added to his analysis “When Néstor took office in 2003, until 2007 or so, he had an exchange rate that was stable at what would be today perhaps regarding 700 pesos, so he having devalued up to 800 pesos will make the country more competitive, That is, cheaper for those who are abroad and I think it will allow the government to accommodate the variables in the coming months,” said the financial specialist.
Strong measures for the crisis, but far from being a stabilization plan
He thought something similar Natalia Motyl, of NM Consultant. “Evidently The markets give a vote of confidence to the emergency measures carried out by the incoming government. The government’s message was clear: the measures aim to avoid hyperinflation,” he said. although he recognized that “however, They are far from being a stabilization plan that Argentina needs hence The trend will depend on the reforms that are carried out. “This is fundamentally a reduction in taxes and regulations that allows us to cushion the impact of contractionary policies to mitigate the rise in prices,” he said.
The measures and the reduction of the exchange rate gap
Also Andrés Reschini, of F2 Solutions He admitted that there was a vote of confidence these first days. “In general, The markets have shown a positive reaction in the first week of the administration“, said.
In his assessment, “The measures that they made known achieved an abrupt reduction in the exchange gap from 180% to 27% at the close of Thursday, even with a drop in the repo rate and a high degree of liquidity in pesos in the financial system, which represents a important support from the market to the signals sent from the economic team“he commented.
For the market analyst, it may be that the market and the population in general expected another response from the tax point of view. “Now the reaction in the social climate will be key when it comes to ‘paying the bills’, as well as the response to the reactions of the opposition and to what extent the challenges in Congress and with the provinces can be overcome,” he said. he.
Finally, he said that “there are still doubts in the market, especially around the path proposed for the official dollar due to the high levels of inflation that we will have to go through, at least in the short term.”
Wait a little longer to see market confidence
For its part, Walter Morales of Wise Capital, indicated in his weekly analysis that To see if the market trusts it or not, we will have to wait a little longer.
“Market confidence We are going to see it with the liquidation of exports, the evolution of the prices of sovereign bonds in dollars, that the exchange gap remains low and contained, the interest on the hard dollar bonds for importers that are going to be issued, and the price of the dollar Futures,” he noted.
Dollar at $800: they warn that inflationary dynamics might liquefy the devaluation in a few months
And in that line he added: “Now, we expect CCL/MULC restrictions to continue because the Government financially does not trust that the fiscal anchor is sufficient to avoid a run towards financial dollars, especially due to the magnitude of the stock of pesos existing in the market,” he said.
And to close his diagnosis he noted: “Up to this point we have to say that, The adjustments will continue, at least in the exchange rate. It is that heJust think regarding the inflation that is coming, if there is not, and there will not be, less tax pressure, “Just as the real exchange rate improved strongly for exporters, it will reduce very significantly towards April”he predicted and added: “I would even be encouraged to say that we would return to the starting point without the Economic Plan, it does not have a service. As you will see, slowing down inflation is key and there, as we have been telling you, the interest rate should be raised sharply, taking advantage of the fact that companies do not, in general terms, have stock problems,” he argued.
Stocks and bonds up in the first week
In order to learn a little more in detail what happened to these first five wheels on the marketLentini made a racconto with the papers of the leading companies and with the bonds.
“Stocks celebrated on the rise as we expecteds with the Milei plan that reduces all types of additional expenses, as well as bonuses. “This has to do with the fact that every restriction and every saving generates a greater possibility of paying those bonds.”admitted the analyst.
Milei reappeared in an Instagram live from the Casa Rosada: she donated her last salary and talked regarding the economic plan
However, He was not so optimistic regarding the future. “In the year 2025 we are going to have serious problems thinking regarding the different bonds and their payments. There have already been reports of investment banks from abroad that question the possibility of Javier Miley paying all of his commitments precisely to the rest of the world in 2025.“he warned.
To see positive signs, Lentini saidmó: “We will have to see if at the end of the year 2024 if it manages to generate a surplus. “The social and political cost seems to me to be great, but that is what can define the trust of the rest of the world.”
To close his analysis, he referred to money laundering. “We have mentioned this many times; money laundering is a bit of a windfall for each government that arrives and there are still many rumors but it will surely be a chip that will be played aimed at strengthening the national banking and financial system by stimulating private put those undeclared dollars there,” he concluded.
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