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Dangerous contradiction: cheap dollar and country risk over 700 points



The central bank made it clear that the dollar has a political side that goes beyond the economic ones. Not only did he not lift it to the bottom of the water, but bought a smaller amount than the usual, which could improve its closing price. It seems to be more comfortable with the delayed exchange rate, even by incubating the same problem that led to the current crisis.

Delaying the exchange will prevent it from gradually abandoning the scheme in the future. Because arrears are not recovering in stages, but at one point. The closeness of the election may be the fire that illuminates the wick.

For all of a sudden, the country's risk increased by 0.72% and equaled the ceiling of 700 points. And this is the right measure of how investors see the economy. Everything else is the scenery that surrounds the central actor: the credibility of investors in the bonds of Argentine debt.

Bonar 2024, a benchmark in dollars, lost 0.24% while the cost of the US Treasury rose in price and reduced its yield to 2.69%. Argentina here has a big problem because it can not use the fact that the United States has given up interest rates.

On carry trade (sells dollars to bet on pesos, taking advantage of high rates) it's yo-yo where the local currency profits always return to the dollar. While the euphoria of profits incited by the Central Bank that has nationalized the system to absorb, through liquidity letters, all fixed terms, the dollar will be delayed. But why do not people buy dollar bonds taking advantage of 10% annual return rates? The answer is that most of the weight carriers in fixed conditions and in Lekap are in the starting line to get out and buy dollars when time changes.

Changing the rules of the game in Waka Moerta that struck the investment companies to which they were subsidized, so that they began to work on the deposit, fell badly abroad. In order to increase the collection and reduce the deficit, the government again changed the rules of the game and added points to the country's risk.

The dichotomy between bonds in high-yielding pesos and a cheap dollar is the inconsistency of the scheme, because the devalued dollar means a prosperous economy and bonds with a fall in parity, that there is no interest in investing in that prosperous country. The scheme is as unsustainable as compiling a team with ten major players and without a goalkeeper.

In the wholesale market, the dollar opened 10 cents lower than the previous day and The headquarters went out to "hold" it close to the end, buying only $ 20 million from $ 37.58 instead of the usual 50m. The currency reacted, but closed 22 cents to 37.53 dollars and reached 33 cents to reach the lower part of the currency band.

It is that Central has another problem that limits it when buying dollars. Every time you buy currencies, you release the sand, and Lelik seems to exhaust your capacity for aspiration. In fact, it changed the system. Now, before each offer, you will announce how much you are putting out. He wants to have more control over the monetary base.

He placed $ 160 billion on Wednesday's tender, which not only allowed him to absorb $ 5 billion, but also allowed him to lower the interest rate. The rate of decline, the highest rate, fell by 0.74 points to 55.19% pa, and the average rate fell by 0.76 points to 54.89% per annum.

In the banks and exchange houses, the dollar for the public was sold for 6 cents more expensive than $ 38.59. The "Blue" lost 50 cents that it won the previous day and was $ 38.25.

Reserves rose by 39 million to 66,406 million US dollars, despite the fact that overseas gold and euro gold earned $ 48 million. In addition, we must add the procurement of 20 million and we deduct 82 million for payments to international organizations and Brazil.

The stock market experienced euphoria on world markets when it was confirmed that the Federal Reserve confirmed that the interest rate will not increase and will talk about its concerns about the world economy.

With a business under what was usually 15 days ago, S & P Merval grew by 1.49% with operations for $ 592 million.

Banks continued to increase the index. The supervisory (+ 4.19%) and French (+ 2.54%) were the main points. The increase in oil of more than 2% affected the rise of Petrobras (+ 1.77%) and YPF (+ 1.11%).

Tenaris, from the Techint Group, increased by 2.29 percent. The company was not affected by the reduction of gas subsidies derived from Waka Moerta because TecPetrol is a company that manages the deposit and does not have shares in the stock market. Only debt securities issued abroad.

Argentine ADRs, Wall Street Wallet Proofs, have almost increased increases. The best went through Bank Supervision (+ 3.8%) and MercadoLibre (+ 3.1%).

Thursday ends the month and will have hedging operations. The peso is a broad winner, and the dollar appears to be condemned to end January under the flotation band, a story that can be repeated in February or, at least, in a part of the month. Another story that has great chances to follow is the increased risk to the country. Investors do not want debt bonds from the Argentine dollar, although there is a higher demand for securities from developing countries.


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