Dollar goes up and reserves go down | The currency sca …

The dollar is approaching a new record. The price closed at 46.80 pesos and an advance of 32 cents. The Central Bank is tipping the tightrope to prevent the exchange rate from exceeding 47 pesos per election day. The monetary authority's strategy is to intervene in the dollar futures market and to increase the Leliq interest rate in order to moderate the pressure of the exchange rate. The decline in reserves was $ 416 million on Wednesday and recorded a loss of $ 1513 million in the last three days. Operators do not rule out that the plant begins to draw the currencies to stop the devaluation.

On Wednesday, the power plant raised the interest rate to 63.28%. This represents an increase of 65 basis points in the day and 254 points since the beginning of the month. Since mid-July, the rise has reached almost 500 basis points. The response of the monetary authority to the financial pressure is to increase rates. The measure has a new impact on the production of the internal market. Contractive monetary policy is increasingly criticized by economists.

In Ecolatina consulting firm, they calculated the real rates (taking into account the effect of inflation) proposed by the central banks. "The real interest rate for July was close to 11% annualized and rose 9% in June and 5% in May." In his study, he stated that "the domestic market needs real rates (to avoid monetary instability), but not so high". In British Columbia, they have no possibility of worrying about growth or production: the main objective of the entity is to maintain the exchange rate for a few months.

The inconsistency of the plant's short-term policy is what accentuates the macroeconomic imbalance and increases the likelihood of a currency crisis. The Argentineans in recent decades have experienced significant frustrations with the peso. In the Ecolatina study, they describe the following: "The Argentinian who saved his whole life through a pesos instrument has a history in crisis. Hyperinflation took its first savings almost completely and what was left was part of the mandatory exchange of the Bonex regime. The savings achieved during convertibility were within the limits of the corralito and the exchange rate and, subsequently, inflation, which has had the effect of reducing the purchasing power of fixed savings.

Country risk

Country risk ended Wednesday at 897 units. Most registered foreign currency bonds fall. The setbacks of 0.9% of Discount 2033 and 0.8% of Argentina 2037 were highlighted. Short-term bonds (with a maturity of less than one and a half years) operate with hard currency rates of return. nearly 17%. This makes some economists say that country risk is closer to 1500 than 900 points.

Buenos Aires bag

The shares recorded losses. International markets have not generated any contractual effect. The big bags of the world have registered slight increases. Investor anxiety for Argentine badets is starting to be tied to internal elements. The main one is the electoral uncertainty. The stocks that fell the most came from banks and energy companies. The pensions of 3.5% of Supervielle and 2.2% of Galicia stood out in the New York market. Among the energy companies, the 2.2% decrease in the center of Puerto was marked.