Weekly

Weekly Reports

The Steps of Inflation

First week
of December 2019
Inflation in Argentina is endemic. With the exception of the Convertibility period, we have been dealing for over 15 years with a “stepping” inflation, which went from a step that averaged 10% in 2003-06, to 20% in 2007-13, to 30% in 2014-17, and now 50% in 2018-20. The latest estimations for November show a new upw...

Unfavorable external conditions for economic growth

Fourth week
of November 2019
The next government will face international conditions that won't represent a remarkable boost for economic growth in the following years. Unlike during other periods, in which governments were favored by an increase in the international prices of exports and the acceleration of regional growth and world trade, nowa...

Facing New FX Dynamics

Third week
of November 2019
The Central Bank started buying reserves again after the FX controls were tightened. So far in November, the Central Bank has bought around USD 1.5 billion. Without any doubt, this has brought relief and marked a turning point regarding the worrisome former dynamics at the expense of, obviously, tightening controls....

In Search of a New Instrument to Sterilize Pesos

Second week
of November 2019
From now until the end of this year, the National Government needs around ARS 330 billion in order to cover for the primary deficit ─which is seasonally high in December due to the payment of the 13th wage and other expenses─ and the interest and capital payments of the bonds in pesos that were re-profiled at the en...

Dead Leliqs May Bite

First week
of November 2019
In August 2018, a decision was made to defuse the so-called “Lebacs bomb.” With the passing of time, the apparent success of this defusal became irrelevant, and people started to demonize its heirs: Leliqs and Lecaps. Lecaps were recently reprofiled, and now it seems that the next step is to defuse Leliqs. We will o...

A New President

Fourth week
of October 2019
Yesterday’s general election confirmed the suspicions that had been lurking since the primaries: chances of the ruling party turning the election around were very low, and the most probable scenario was a victory of the opposition in the first round. The provisional scrutiny currently grants 48% of the votes to Fern...

The next government will face tough decisions on utilities, subsidies and inflation

Third week
of October 2019
After the primary election, the government decided to put a halt on the utility adjustments set for the rest of the year and to make a price freeze on gas and the rest of fuels for 90 days. These measures were taken in order to reduce inflationary acceleration on the short term, derived from the 30% devaluation foll...

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 ...