Argentine debt achieves repurchases due to exchange rate delay and expectation of dialogue with IMF

Argentina’s sovereign bonds recovered the investment playoffs on Tuesday against attractive prices after a sharp retraction last week with the victory of the ultra-liberal javier milei in the primary elections (PASO) to determine candidates for president.

The Government has just devalued the wholesale peso by 17.9% and set an exchange rate at 350 units per dollar until the end of October, and increased its reference rate by 21 basis points to 118% per year in the midst of a three-year inflationary escalation annualized digits.

“Today it is practically impossible to draw conclusions about what can happen in the future; The only certainty is that Argentina is on its way to going through a few difficult months in which uncertainty will reign, with a fragile macro environment and a delicate social context.”, said Invecq Economy.

miley It caused an economic and political shock that hit the financial market hard, which made the Minister of Economy and presidential candidate for the ruling party, Sergio Massa, uncomfortable, who is currently in the United States to hold different work meetings.

On Wednesday he has a meeting on the agenda with the managing director of the International Monetary Fund (IMF), Kristalina Georgieva, with the idea of ​​obtaining a disbursement of fresh money to give some peace of mind to the markets after reaching an agreement in July subject to the approval of the body.

Argentine financial business resumed after a national holiday on Monday.

In the over-the-counter segment, public debt improved by an average of 1.1%, after gaining 0.4% on Friday and after presenting a loss of more than 10% in previous sessions due to doubts about the future of the third largest economy in Latin America.

For its part, the Argentine country risk measured by JPMorgan bank dropped eight basis points, to 2,103 units around 1515 GMT.

The beaten peso in the marginal exchange place (“blue”) remained balanced at 720 for each dollar, against a collapse of 15.97% the previous week with speculative operations after its price reached a historical minimum value of 795 units on Wednesday .

This recent increase in the informal dollar, which is taken as a reference to adjust prices, would lead to monthly inflation of more than 10% for August, according to private analysts.

Due to the last strong devaluation, despite the Government’s commitment not to abruptly alter the official parity, the central bank (BCRA) managed to recover some US$ 657 million last week, for net reserves of around US$ 10,000 million. in red.

In the alternative electronic exchange rounds, where bonds are traded to dollarize portfolios, the peso fluctuated with drops to 715.7 units on the “CCL” stock market and to 667.6 units on the so-called “MEP dollar”, with the intervention of official entities to stop the debacle would change.

As an expected oxygenation of the market, the leading S&P Merval index of the Buenos Aires stock market lost 0.16%, to 583,357.01 units, after marking an intraday record level at 586,732.30 points and accumulating a gain of around 27%. in the last sessions.

Source: Reuters