Reserves fell due to yuan devaluation and inflation-adjusted bonds soared

Adrian Scandar

Once again the fall of the yuan embittered the government. The Chinese currency, which represents 52% of the reserves of the Argentine Central Bank, lost 0.25% of its value and closed at 6.9070 against the dollar.

For this reason and for the purchases of dollars from the quota of USD 200 per client, which was quoted at $240.67, the reserves lost USD 90 million and are at USD 36,641 million. In the last 5 rounds, the reserves fell by USD 387 million, despite the fact that in that period it bought USD 44 million in the wholesale market.

The weakness of the yuan against the dollar complicates official plans. Given the advent of inflation that would slightly exceed 7% in August, they are thinking of raising the interest rate between 5 and 6 points.

This situation transcended the market and it made the financial dollars fall and the bonds that adjust by CER and the dual ones that protect against inflation and devaluation at the creditor’s choice rose.

Among the Boncer, the one that expires in 2023 rose 2.41% and 2024, 4%. The dual bonds had rises of up to 2.41%, as was the case of the TDS23 that expires in September of next year. The duals that were issued on August 12 accumulate increases of more than 10% in dollars and pesos.

Investors see an opportunity in the hardness of the rates to carry out operations in pesos, turning to indexed securities and then returning to the dollar (carry trade). This was how, despite the drop in the bonds with which financial dollars are traded -the AL30D lost 0.05% and the GD30D, 0.95%- prices crashed. The MEP dollar lost $4.75 (-1.5%) to $278.73 and the cash with settlement lost $4.09 (-1.4%) and closed at $288.74. Businesses were around USD 170 million, a volume lower than usual. This market regularly trades just over USD 200 million daily.

The “blue” fell sharply from $5 to $285 and in the wholesale market the dollar closed up 30 cents at $139.05. The rate of devaluation is maintained and the exchange delay causes an acceleration of the fall in reserves because in Brazil the real continues to be devalued. Yesterday, the dollar rose 1.14% against the real, trading at 5.24. The trade balance deficit with Brazil is USD 1,960 million so far this year. The more the real devalues, the more imports from Brazil grow due to the disparity in exchange rates.

The debt bonds in dollars remained balanced and the country risk remained at 2,388 basic points.

$1,492 million were traded on the Stock Exchange, a modest volume. The S&P Merval, the leading stock index, rose just 0.06% in pesos but rose 1.50% in dollars.

The ADR’s -certificates of holdings of shares that are listed on the New York Stock Exchange- traded a somewhat higher volume than the previous days. Businesses reached $4,492 million in a wheel where the rises predominated they stood out edenor (+6%) year BBVA (+3.1%).

For now Investments in pesos continue to triumph. The proximity of a new rise in rates and higher inflation reinforces the positions of those who choose indexed bonds and provincial titles in dollars that have a high rate of return in the US currency.


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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