in the middle of a new Argentine debt collapsethe Government anticipated to find an “opportunity” to speed up the buyback process which was announced in the middle of last month. This Tuesday, dollar bonds, in line with all emerging debt, drop of more than 4%and add like this three wheels in a row with negative returns.
The Undersecretary for Finance, Eduardo Setti, announced on his Twitter account that the recent collapse in prices, after the rally recorded in January, is due to a changing global financial conditions and that, despite limiting the persistent decline in reserves, it will double the bet.
“The Fed rate hike has generated a general downturn in emerging markets which gives us the opportunity to continue to consolidate the buyback process. Today we will be on the market with 20% within the announced program“, the official said. After the publication of the tweet, the price of Global 2030, a bond in which more than 90% of the transactions were concentrated, bounced.
In this way, the Central Bank will throw 200 million dollars on the market this Tuesday in what, according to the consensus of the operators of the Municipality, is none other than a new move to intervene on the price of the financial dollar. In the consulting firm Aurum Valores they estimated that as of this Monday the agency had already allocated about 600 million dollars in the buyback process.
The timing is surprising: Owing to Monday’s IMF deadlines, the central bank’s gross reserves fell by $700 million to a total of $40,286 million. On the market, it is taken for granted that the reserve accumulation objective agreed with the agency will be difficult to achieve if, once again, Sergio Massa does not “pull out” some new trick, such as a new version of the soybean dollar or a Repo (loan) with international organizations.
“Wake up one growing restlessness the dynamics of net reserves, since the daily foreign exchange drainage does not stop and moreover at a speed that leaves the delayed and minor liquidation of the future harvest too far away”, said the economist Gustavo Ber.
“Despite currency and currency challenges, theFor the moment, the interventions to be able to regulate the financial dollars continue such that they continue to go through a phase of relative calm, even when it is recognized that pressures will increase, so soon may be the best strategy allow for a gradual bullish reset“, He added.
What was the outcome of the CNV survey?
In the meantime, the CNV is proceeding with the investigation to find out if there were operators on the local market who had access inside the information on this debt buyback program. and in the city suspicions grow about the real reasons for this measure.
“The problem is that because they buy against dollars and then they or other organizations sell against pesos to stretch financial dollars, the stock of bonds in the market doesn’t change. And if the stock of bonds doesn’t change, the pars will depend on the demand for additional factors and not for the buyback transaction”explained one market operator outgoing.
“At the end of the day you would have fewer reserves and fewer pesos on the market, for the sale of bonds against pesos. There, the lower supply of pesos could help reduce financial dollars, but as they also have to buy peso bonds to prop up prices, there is still an oversupply of pesos putting pressure on both the CCL and the MEP.” , added the same source.
After noon, financial prices were climbing. The MEP, or stock market, dollar rose 0.9% to $357.22, while settled cash appreciated 0.3% and traded at $366.91. The blue dollar stood at $375.
Source: Clarin
