Wednesday , May 12 2021

Dollar against the floor, local IMF and bonus for ANSeS – 02.12.2013

Tomorrow the agreed deadline between Government and the Monetary Fund so that the Central Bank can reduce the reference interest rate below 60% per annum.

The limit was set according to whether there were two consecutive months in which Market Expectancy Survey (REM), which stems from the average of the consultants' estimates, means reducing the annual inflation forecasts. Will it be fulfilled?

The consultant Eco Go who runs Marina Dal Poggetto projects have increased the cost of living by 2.9% for the past month (October was 5.4%) and 48% for the year and, he added, the highest since 1991.

In the same report, a magnifying glass is placed on the possible effects of such high figures for an economy with a high degree of indexation and which, according to official announcements, still has 50% increase in tariffs for water and 60% on gas for the next year.

The counterweight of that inflation ball is deposited in the tranquility of the dollar, which went back last week to revise its titles at $ 37.72 at the end of Thursday, with a 2% drop from the previous day and 3.5% compared to Monday's rise, which generated some concerns on the market.

The weekly balance was that Guido Sandleris, the head of Central, ratified that its goal is to dry the peso market to contain contingencies in the foreign exchange market though, and in this there is a coincidence in the business world, prices have already been fixed at $ 40 It does not want to give positions even when the fall in sales was strong last month. And the worst is over?

An important answer was given Christine Lagarde, which predicts that the economic situation "It will be difficult over the next three or four months, and then there will be a change."

The vision of the holder of the monetary fund corresponds to that of economists on the side "optimistic", They are betting that in April or May, the country begins to emerge from the recession. Will it be like this?

That optimistic vision, which is the Government, relies on the entry of US dollars export of wheat, corn and soybeans and thus, despite the world oil drop, Vaca Muerta can give a lot of good news regarding gas exports.

The rest will depend on parity and that Sandleris can speed up interest rates cuts since February. Naturally, the Minister of Economy ratified it with firmness, Nicolás Dujovne, within the framework of the G-20 meetings, "Firstly, inflation must go down, and then rates will decrease."

But in the middle it will be necessary to carefully monitor the evolution of deposits in pesos in banks, which in the last two months they grew by 20% and they became a necessary counterpart of the calmness of the dollar.

Fixed conditions rose sharply from the fact that banks paid savers Rates between 45% and 53% and now receive from the Central Bank about 61% a year to put the pesos in Liquidation Letters (Leliq). In this context, it is expected that the pace of low rates will be very moderate.

Finally, there was clear signal about how the government plans to faceof the debt internal public sector which can decompress the vision of some of the market operators that bet that Argentina can not meet its debt obligations by 2020.

The case is expiring Bonar 2018 that ANSeS had about 3,500 million US dollars and that he was going to win. What did the Government do? What is usually done with the debts that public agencies have with the Ministry of Finance: they are refinanced.

Issued two bonuses, one in dollars for $ 2,300 million to 8% a year by 2020, and another in pesos for the equivalent of $ 1,200 million by 2022, which is updated for inflation.

The issue becomes relevant because, according to the latest official statistics, the debt between public agencies and, therefore, is a renegotiation almost 42% of $ 327,167 million, which gross public debt reached in June. A signal to be considered in the middle of a cloud of heavy news for economic activity.

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