Wednesday , August 4 2021

Instability and depreciation: Year of the dollar

The price of the dollar closed in 2018 with an increase of over 100%, and the Marval index on the Buenos Aires stock exchange gained a marginal 0.75% in the peso measurement and 50.2% in dollar terms in a similar period, a 12-month inflation rate of around 48% After reaching a maximum of 74% in the first days of October – ended this year with 59.25%.

The dollar-level retailer fell 1.40% today to close the day at $ 38.85 pesos based on the daily average easing by the central bank. In this way, during the current year the US currency recorded an increase of 105%, due to the fact that on the last working day of December 2017 it was $ 18,921.

In the wholesale segment, the dollar was down 60 cents from the previous day at $ 37.70, up slightly over 101% in the last 12 months.

The highest price of the US currency was on September 18, when it closed at $ 40,502, the day some of the banks ran it at around $ 44.

Experts agree that the trigger was initially the message of President Maurizio Macri regarding the renegotiation of the agreement signed in June with the IMF, which has not yet been approved by the multilateral organization, and the objections that came from Washington on the mission that Luis Caputo was head of the central bank.

Moro Morley, an analyst at Brava Nortel, said 2018 was "a year of oblivion, in which the devaluation of the peso has severely affected the expectations already weakened by the Argentine economy."

"On Wall Street, Makhteshim Agan was hit hard by a year, with losses ranging from 30 percent to more than 70 percent in dollars – literally almost all of the Argentine companies listed in New York."

Morley said that "financial keys for 2019 still: fiscal solvency, decline in inflation and exchange rate stability," something that can not be cut off the election question – in August PASO will be carried out in October presidential election – and the resulting consequences, especially before the question of sustainability of Argentine debt .

A variable that gained momentum in the last months of 2018 was the country's risk measure prepared by JPMorgan, which had reached a record 837 basis points in the past, the highest since 2014 to date.

The rise in the interest rates of the country, in terms of medium and long term debt, affected the price of sovereign bonds, such as the dollar-denominated Discount under Argentine law, which fell almost 40%, or the Argentina national bonus (AO20). ), With a red of more than 13%.

Together with the local factors in the Argentine crisis, the international context was also affected by increases in rates set by the Fed, forecasts of new increases in 2019, and the consequences of the US-China commercial war.

Sabrina Coroz, of the Portolillo Federal, said that the annual balance of what happened on the Buenos Aires stock exchange "broke all expectations expected a year ago."

The expert hinted in this way to the summary numbers that, in the first days of January, the Marval was recorded, reaching its last high of 35,145.45 points.

"The sharp depreciation of the currency caused by the crisis of confidence in the government was responsible for the impact both on the stock market and on all the real variables of the Argentine economy," Coroze said.

Looking to the future of 2019, the analyst was convinced that "the worst has already happened and this year closes under a climate of exchange stability, as well as slightly lower interest rates."


  • balance
  • Exchange market
  • dollar
  • Sandleri
  • Central bank
  • bcra

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