Financial day: the free dollar deepened its decline, but the Central Bank could not add reserves

The free dollar rises 37% in 2022.

The free dollar basted its third low wheel and noted down their lowest prices in a month. He also returned to the price level of last July 13, with which he discounted a good part of the run that catapulted the note to a record of 350 pesos on July 22.

The exchange relaxation was not enough for the Central Bank can add reserves for its market share, although it managed to chain another session without sales. Meanwhile, stock market assets operated unevenly in general, in a framework of fewer businesses and subject to a strong volatility in the New York stock markets.

The free dollar started september with drop of five pesos (-1.7%)a $285 for sale. Thus the free dollar ended up in his lowest price in a month -on August 1st it closed at $282- and also returned to a value similar to that recorded in mid-July.

The decline was accompanied by alternative dollars that are traded through stock assets. The “counted with liquidation” through the Global 30 bond (GD30C) ended at $288.74 and the MEP dollar with the Bonar 30 (AL30D) ended at 280.82 pesos.

The wholesale dollar gained 30 cents to 139.03 pesos. The exchange rate gap reaches 105%, the shortest since last July 7.

The Central bank ended its foreign exchange participation this Thursday with $1 million marginal buying balancein its tenth sect wheel with a positive balance. Since last August 10, he recorded net purchases for a total of about $326 million.

The monetary entity faces a 2022 with a positive balance of USD 42 million for its participation in the wholesale market, an amount that represents barely the 0.6% of the net balance in favor in the same period of last year, of about USD 6,981 million as of September 1, 2021.

Rebound in stocks and decline in bonds

Despite a marginal rise, the Buenos Aires Stock Exchange operates with marked caution given the distrust of the Government’s actions with the implementation of new economic measures, amid fears of a global recession that hits emerging markets.

The Minister of Economy Serge Massawhose objectives are to reduce the fiscal deficit, strengthen BCRA reserves, reduce inflation and promote exports, plans meet next week in the United States with officials of Monetary Fund International (IMF) and businessmen.

The stock index S&P Merval of the Buenos Aires Stock Exchange ended with a marginal gain of 0.04%, at 136,200 pointsafter trading in the morning below 135,000 points. It should be noted that the Merval comes from advancing 11.2% in pesos and 9.5% in dollars during August.

Among the ADRs and shares of Argentine companies that are traded in dollars on the New York Stock Exchange, gains prevailed, led by Edenor, with 7.3 percent. YPF rose 2.4% (USD 5.62) and Grupo Galicia gained 2.1 percent.

Source: Rava Stock Market.  Prices in dollars.
Source: Rava Stock Market. Prices in dollars.

“The Argentine energy company YPF It took all the eyes of investors after showing its solidity during this year. After a dazzling balance, he announced a 10% increase in his investments and an improvement in the company, both in relation to Vaca Muerta and also with lithium, a key factor for the Government in the next meetings with the IMF”, he stated. Ayelen RomeroExecutive of Accounts of Rava Bursátil.

Regarding debt securities, bonds in dollars subtracted 0.5% on average, according to the reference of the Globals with foreign law, while the country risk of JP Morgan rose three units for Argentina, to 2,388 points basics at 5:20 p.m. The Globals in dollars ended the month of August with an average decrease of 1 percent.

“It is possible that the minister will take advantage of his stay in Washington to agree details of such a plan with the International Monetary Fund and announce it upon his return,” he said. Victor Beckerdirector of the Center for Studies of the New Economy (CENE) of the University of Belgrano. “Beyond the fluctuations in the inflation rate from one month to the next, a comprehensive plan of attack is required if it is to be lowered significantly,” he said.

Analysts estimate that the August inflation will be between 6% and 7%with which the projections to end the year are around 95 percent.

“With inflation rising a new level, the exchange rate gap exceeding 100% and international reserves at the limit, the mission of the new economy minister will be to avoid a jump in the exchange rate and achieve a stable transition”, commented Martin PoloHead of Strategy at Cohen Aliados Financieros.

The Merval index maintains a gain of 63% in pesos in 2022, in the face of inflation slightly below 60%

Polo added that “for this, it must achieve credibility in a fiscal plan that reduces the financial needs of the Treasury, as well as halt the deterioration of the exchange balance and recover international reserves.”

Analysts agree that net reserves are currently very close to 1,000 million dollars and the goal set with the IMF is to reach 6,100 million by the end of September.

Another rate hike?

The directory of The BCRA could increase its reference rate this month to a level of around 75% to keep investment in pesos attractive in the face of inflationary pressure and the constant demand for dollars, he stated this Thursday to Reuters a knowledgeable source.

“It is expected that there will be advances soon regarding a new soybean dollar (in favor of agriculture) that will contribute to accelerating liquidations, in order to gradually recover reserves that are becoming the main focus of investors in the short term,” said the economist Gustavo Ber.

He argued that in this context, “I think the central bank should also continue raising the rate this month, and in that sense the range of 500 to 600 basis points would be the logical one.”

KEEP READING:

The free dollar started September low and closed at $285, its lowest price in a month
Markets: Wall Street rallied over the close and Argentine stocks ended positive
Soydollars: despite the drop in producer sales, the income of dollars in August was a 20-year record

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