Weekly

Weekly Reports

Three challenges for the first 100 days of government

Second week
of October 2019
The government that will take office on December 10th will face a demanding debt maturity schedule during its first 100 days in power, but it will also have to finance December’s primary deficit, which is high due to seasonal factors. Even using all the dollars which correspond to “reserve strengthening” by the end ...

The return of seigniorage, an old acquaintance

First week
of October 2019
Seigniorage is the public sector’s financing source that derives from its ability to issue currency. In a way, it is becoming the center of attention once again, facing the closure of markets to place debt and the temptation of using it to cover for the fiscal deficit and thus avoiding the political cost of a greate...

The key for a successful debt exchange is a further fiscal adjustment

Fifth week
of October 2019
Last week, Alberto Fernández stated his intention of offering a “Uruguay-style” reprofiling. After his declaration, dollar bonds reacted positively with rises of up to 5%. In 2003, our neighboring country made a voluntary exchange that had a very high adherence ratio: 98%. The new bonds offered in the debt exchange ...

The balance of the first week with FX controls

Second week
of September 2019
So far, the current controls have been enough to bring some calm to the FX market and to stabilize the wholesale exchange rate at 56 pesos per dollar, while the CB has modified its way of intervening: it is no longer using auctions in which it pre-announces the amount it will sell but instead it makes discretio...

Better late than never

First week
of September 2019
The government finally decided to introduce new regulations to the FX market in order to stop the fall of international reserves in the Central Bank. We believe that although the timing is inappropriate, these regulations are necessary in the current context. Our opinion is that the government should have considered...