A week after STEP, Macri begins to lose control of the economy

It's already the current motto that the president's economic model, Mauricio Macriyou have serious limitations. Seven days after the primary elections, the central bank (BCRA) appears to be outpaced by the significant rise in the dollar over the last two weeks, while the liquidity letters tendering program (Leliq) does not give results and interest rate do not stop climbing.

With money disbursed from the IMF, the government hoped to keep the American currency until at least after the election process. In addition to the dollars needed to intervene in the market, the Fund has enabled the station to make its operational framework more flexible and to take the necessary steps to create a climate conducive to re-election. However, in the last part and despite the favorable wind, the macroeconomic conditions put the change in check.

The dollar rose in four of the five days of the week and rose 7.1% in 15 days, leaving the limit at $ 46 (45.88). During this period, the BCRA operated in the futures market and raised the rate for 10 consecutive days for 61.13%. Nothing worked.

The figures illustrate the exponential evolution of Leliq. In ten months, the debt for this 7-day debt has increased by 174%, adding a stock of $ 1,177,000 million ($ 1.2 billion). The acceleration is such that an average of $ 265,000 million per week is already renewed, which equates to 274% more than the beginning of the plan. Interest has already been paid out for nearly $ 432 million to the banks.

Debt securities already represent 40% of reserves or 85% of the monetary base. In June alone, some $ 56.944 million was spent in public coffers and, in the first six months of the year, they reached $ 297 billion.

But that did not stop the dollar in the last stretch of the first part of the campaign. Regardless of the level of interest we have set for Change, be it 40%, 60% or 80%, investors are speculating on the imminent withdrawal of Macri from Casa Rosada in December and do not fear the "return of Kirnerism "They want to install economists close to the ruling party.

As said the presidential candidate of the Front of All, Alberto Fernández, in El Destapeit will be almost inevitable to disarm the financial scheme of the Leliq, be it for the political sign it is. Sectors close to the government, they recognize that a rate at these levels is unsustainable and that this causes a dollar jump a few days for the PASS.

UNITED STATES PLAYED FOR MACRI

In the midst of the turbulence of trade, in the middle of the week, Donald Trump, president of the United States, seemed to be providing indirect help to Macri, such as water in the desert. The United States Federal Reserve (Fed) has lowered the interest rate between 2 and 2.25%.

The movement generates more dollars available and makes the US less attractive in financial terms. Some of that money could go to emerging markets, which are paying much higher rates.

If all interest rates paid by these markets fall, some short-term maturities could probably be renewed at lower rates and lower prices. country risk Go get credit. However, it's theoretical, because the opposite has happened.

The indicator measured by JP Morgan ended Friday with an increase that led to its peak in five weeks (831 base units). To this must be added the aforementioned rise in the greenback with the resulting rate hike.

It remains to be seen how the government will behave the week before the elections. The rest of the year, the plant will not have resources outside those already known: IMF, rate, futures. Although it is not yet out of control, the upward trend of the dollar was the X factor that the government had proposed to prevent the cimbronazos in the economy and did not not reached.