It has not been a good week for Argentine assets, which have come under pressure since deterioration of financial indicators at the local level and the global turbulence generated by the collapse of a regional bank in the United States and its collapse in Europe, with the Credit Suisse crisis.
This Thursday, in a market also keeping tabs on the Central Bank’s board meeting and its rate decision, bonds slightly reversed their fall with gains of less than 1% and parallel exchange rates rose by a another notch.
The blue dollar climbs $4 to $383a mark it hadn’t seen since late January, when it peaked at $386. Financial dollars, meanwhile, take another step forward: Cash with liquidation, the way companies use to become dollarized, is up 0.5% and is one step away from $400.
The pressure on foreign exchange comes in a context in which the Central Bank continues to lose reserves and has already sold 636 million dollars this month alone and nearly $1,700 year-to-date.
Moreover, the inflation jump forces the agency to tighten its rate policy, something it had avoided since September last year due to its quasi-fiscal cost and its impact on the business.
“The BCRA would raise interest rates, which, being already at such a high level, do not have such an abrupt impact as in the global arena. In this way, the desired consequence of reducing inflation and weighing on the economy, avoiding flows to the dollar, they only generate adverse scenarios of more expensive public funding more difficult to meet payments,” noted consultancy firm Aurum Valores in a report for its clients.
Despite the slight recovery on Thursday, Argentine debt securities are down more than 15% this month and most of them have come to erase the gains accumulated at the beginning of the year.
Country risk improves by a slight 0.3% and stands at 2,391 points.
On the stock exchange, hand in hand with the improvement of the main Wall Street indexes, the cards of the Argentine companies listed on that market are for the most part rebounding. This supports the Merval index, which rises 3.5% after midday.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.