Argentina less vulnerable: has helped the falling dollar in the world and now it remains to be seen whether the plant will buy or not

The dollar hit the bottom of the band and rose slightly without the intervention of the Central Bank. Country risk continued to fall and interest rates even fell slightly. News from the market was positive enough to be celebrated in government.

And in case they lacked reasons, there were investigations where Mauricio Macri It has improved its numbers and the nascent calm of the global crisis because the possibility of raising rates in the United States is far away and discussions are underway for the trade war with China to begin to end before the Davos Convention, Switzerland. begins on January 22nd.

The news has turned the dollar around the world and Argentina, where the currency on the wholesale market has hit the floor of $ 37.28, which was the starting order for the Central Bank. At this price, I could buy $ 50 million in the market, but it was not necessary because it immediately bounced back to $ 37,305. At 11:30, it had reached its highest price, $ 30.45, then it had fallen due to lack of buyers. The price at which it closed on Monday is equal to the value of the lower floor of the band of $ 37.30 on Tuesday. Do not forget that this flotation band adjusts daily to an average of 2% per month.

It remains to be seen whether this time the Central Bank will buy. He announced that he would buy up to 50 million USD a day.

With this price, the dollar is $ 10 from the upper band. Exporters complain about the lag in exchange rates, but polls show that people are happy with the weak dollar and real government wages are less bloody.

Anyway, it will be necessary to see if the anesthesia will last when the transport will increase from the end of January and that the new invoices of gas, water and electricity will arrive at you. Not to mention the boom in prepaid medicines and other services, including cable. It is true that the trigger clauses will come into effect from March and salary increases will be discussed. No matter what to get to the presidential elections and get out of the "prison" that causes rates, the dollar and inflation.

In banks and bureaux de change, the dollar to the public remained at 38.40 dollars and in the marginal market, the "blue", almost without operation, lost 50 cents and closed at 39.50 dollars.

With this scenario, The Central Bank arrived serenely at the Liliquidity Letters Daily Call (Leliq) where it placed $ 193.244 million, at an average rate of 58.96% with a maximum of 59.30%. Not only were the $ 15 billion in circulation eliminated, but the reduction rate was reduced by 0.15 points, but the average dropped by 0.32 points. The daily decline is in line with the idea of ​​reducing it to 57% by the end of January.

The Central Bank finds less resistance to lowering the rate as the dollar has no demand and as inflation, even if it is profitable, will rebound due to rising duties customs. The calm outside has some merit. The falling dollar around the world has raised the price of soybeans, which already stands at USD 335 per tonne. At the end of December, it was trading at 310. Oil has also increased, which will allow it to reduce subsidies to Vaca Muerta. In addition, it has lowered the price of US Treasury bonds, another element that has contributed to the country risk reduction of Argentina and is about to drill the 700-point floor to achieve the desired level of 600 points that would solve some of the uncertainty. debt payments in 2020.

This is why, for the Central Bank, the fall of the dollar exceeds the polls. The rise in the peso was another key element in reducing country risk as dollar bonds fell less than the dollar.

By case, el Bonar 2024, the reference dollar, lost 0.82%, but the 2020 Bonar rose 0.44% against a decline of more than 2% of the dollar on recent wheels.. Bonar 2019, the most sought-after stock, lowered its rate of return to 2.97%, while in April, it paid capital and interest at 6.25% per annum. At the other extreme, the dollar discount with the Argentine law, which yielded 14.5%, now has a return of 12.60%

This explains why the country risk has lost 2.05% and stands at 716 basis points. The falling dollar in the world – losing 0.50% against major currencies – and Brazil and Mexico, contributed to the strength of the peso. The suspension of the US rate hike has strengthened the emerging bonds as foreign buyers have returned to Latin America and a few cents in Argentina facing a better electoral landscape, even though they know that everything is ephemeral.

Reserves increased by USD 21 million to USD 65,737 million due to the rise of the euro and gold, which generated gains of USD 106 million. Payments abroad were only 3 million in Brazil to offset foreign trade operations.

The euphoria continues on the stock market, which has accumulated profits of nearly 25% in dollars on 13 consecutive increases. It should be remembered that last year, investors lost 50% and that, to recover from this fall, the stock market should increase 100% in dollars.

L & # 39; s index Merval rose 2.19%, but 35 minutes from closing it had reached a high of 2.96%. From there, there was profit taking. Business volume increased by 75% compared to the wheels before this rebound of thirteen consecutive increases. $ 834 million was made and the most profitable roles were those of banks and energy companies. Macro increased by 7.63% and Transportadora Gas del Norte, 5.42%.

On Wall Street, the ADRs of Argentinian companies increased, with the exception of Banco Supervielle (-0.22%) and Telecom Argentina (-1.58%). Among these holding certificates, the most notable are Banco Macro (+ 6.88%), MercadoLibre (+ 4.32%) and Banco Francés (+ 3.12%).

The government took a pressure, the one coming from the outside. This is not a merit in itself, but helps your monetary policy to be less vulnerable and strengthened in surveys. The market understands it this way. This is why he continues to turn to securities denominated in pesos.