BUENOS AIRES, Oct 13 (Reuters) – The crisis of confidence in Argentina’s financial market again focused on exchange-rate tensions on Tuesday, with stabilization becoming a priority in the short term, as fiscal and monetary imbalance are the causes. on the dynamics of different peso prices.
Staff from the International Monetary Fund (IMF) had constructive meetings with Argentine authorities during an in-person visit the week before and will return to the country in mid-November to begin talks on a new agency-backed program.
Argentina faces complex economic and social difficulties, in a context aggravated by COVID-19. The deep recession has led to an increase in high levels of poverty and unemployment, the effects of which are exacerbated by pressures in the foreign exchange market.
The “price of the dollar (depreciation of the peso) reflects some degree of uncertainty or nervousness (…) manifested in the decline in central bank reserves (BCRA) as a trend,” said economist Daniel Marx.
With an exchange rate gap of 115.7% between the official and informal exchange rates, domestic markets resumed their activities after a Monday with a national holiday.
* The wholesale peso fell 0.34% to 77.40 / 77.41, per dollar, around Buenos Aires noon (1500 GMT), with the BCRA leading the liquidity regulation amid a depreciation scheme of the currency according to the situation, leaving aside a uniform daily devaluation scheme in force until the end of the previous month.
* For its part, the local currency in the informal band remained stable at 163/167 per unit, with a gap compared to the official segment of 115.73% that highlighted the loss of value of the currency.
* Analysts agree that the gap puts any economic recovery at risk, so new signals are not ruled out from the Government, which acknowledges that the exchange market “is disorderly”, although a devaluation was rejected again over the weekend abrupt as a solution to exchange rate volatility.
* “The alarming level of the net / liquid reserves (of the BCRA) and the exchange gap, shows us that the countdown is underway: the Executive has few moves left -controlled exchange jump and / or formal doubling- to change the course of the events “, affirmed the consultant Ecolatina.
* In the other exchange alternatives, the so-called ‘Cash with Liquidation’ (CCL) of the stock market was trading at 157.9 pesos and in the Electronic Open Market (MAE), the so-called ‘MEP dollar’, was trading at 145.6 units.
* OTC bonds were down 0.8% on average, versus a 1.5% drop in the prior week. The reference title ‘Bonar 30’ fell 2.2%, as the country risk rose 17 units, to 1,360 basis points.
* “Within the ‘chronicle of an announced devaluation’, it only remains to see if there is any other intermediate chapter where the Government raises the rates of (bills) ‘Leliqs’, unfolds the exchange market, or goes for more repression to make it fall the demand in the official (foreign exchange) market, “said Roberto Geretto, an economist at Banco CMF.
* The S&P Merval stock market indicator of Buenos Aires fell 0.36% to 45,691.5 units, in a natural readjustment after the fall of the ADRs of Argentine firms on Monday in New York. The stock market comes from accumulating a rise of 11.14% in the previous seven consecutive sessions.
(Report by Jorge Otaola ,; Edited by Walter Bianchi)