Explicit scenes of financial timba | The market…

Foreign exchange controls helped to contain expectations of devaluation during the first three days of the week. The dollar closed Wednesday at 58.06 pesos and marked a 43 cent retracement. The wholesale exchange rate was 56.00 pesos and a slight increase of 2 cents was calculated. The Central Bank again intervened with some sales of reserves to increase the supply. The currency was 5% lower than the peak recorded last week. On the market, they begin to wonder if these controls are sufficient. Reserves have further decreased by $ 405 million and finished in 51.744 million.

The strong rebound of the Buenos Aires Stock Exchange was one of the highlights of the day. An increase of 7% was recorded. The shares of the banks were the ones that increased the most. The increases of 17% of Supervielle and 13% of Galicia were underlined. The energy also marked significant increases. Transportadora Gas del Sur recorded an 8% increase and the center of Puerto 5.

This week has changed the mood of investors. Monday, with no financial activity in the United States, shares of the Buenos Aires Stock Exchange had recorded an increase of more than 10%. Tuesday, pessimism has resumed and some companies have lost 20. Wednesday, the rebounds helped offset a good part of this fall. The Argentine market is an amusement park with slide, seesaw and calesita. The level of financial speculation reaches absurd levels. Bets are of all types and colors. The transactions made with the mid-week PBI coupon were clear. They were the pearl of the date. The purchase order of an investor has increased by 41% in one day.

This transaction was done at auction prices and at low volume, but left a lesson. All investors do not think about the very short term and the economic collapse of these months. The crises are not eternal. The collapse of activity this year could be the opportunity to record a strong recovery in the next. Policies for consumption and production have worked well in other times to stimulate the internal market. The PBI coupon promises extraordinary gains if the economy goes up.

Reservations

The Central Bank continues to lose international reserves. This Wednesday, the fall was $ 405 million and, in the week, the accumulated setback amounted to 2356 million. The monetary authority has significantly reduced its volume of interventions in the foreign exchange market. Last week, it sold $ 300 million worth of currency to keep the exchange rate around 60 pesos. This week, operators said, there has been no sale of more than $ 50 million a day. The central has stopped informing the exact amount.

The main factor decreasing reserves was the exit of deposits. The latest available data from the monetary authorities are Friday, August 30th. That day, $ 1107 million was lost (deposits fell from $ 27,751 to $ 26,644 million). In the economic team, they badured that the fall rate had been moderate over the past two days. Since the elections of August 11, the red was 5865 million.

Exchange controls

For the moment, the market is not convinced of the effectiveness of exchange controls to contain financial imbalances. This is expected to be a first step and, as the weeks go by, regulations will continue to intensify. At the moment, purchases of commercial dollars (for imports) are not limited and the figure for individuals is capped at $ 10,000.

The most experienced traders ensure that the defensive behavior of investors appears. Importers will advance purchases (or issue invoices for values ​​in excess of actual values) in order to generate official dollars. In the retail market, the number of CUIT of individuals asking for the purchase of foreign currency will increase (it is called tingling and this has a significant effect on quantities)).

In the bond market, country risk ended at 2338 basis points, with a drop of 193 points or 7.6%.