Weekly

Weekly Reports

The fiscal deficit was AR$ 5.1 billion in the first quarter

Fourth week
of April 2012
Primary expenditure exhibited a strong acceleration in its growth pace in March and expanded 38.6% per annum. Annual growth was higher than last month (29.9%) and one year ago (32.1%).   Expenditure grew faster than revenues for the fourteenth consecutive month, even though revenues include non-tax resources...

Expropriation after-effects: Argentina’s country risk shot up to 1000 points

Third week
of April 2012
Since YPF’s intervention and expropriation were announced one week ago, Argentina’s country risk (according to the 5-year Credit Default Swap) increased 150 basis points, leaving Venezuela behind. The gap relative to other countries in the region, such as Brazil, reached 930 basis points.   Argentine assets ...

The Government took over YPF and will expropriate 51% of the company

Second week
of April 2012
Following several weeks filled with rumors, the government finally seized YPF and sent a bill to Congress that declares “hydrocarbon self-sufficiency, as well as its exploitation, industrialization, transportation and commercialization, is a matter of public interest and a national priority”.   The bill also...

Despite tension in the FX market, deposits continued to grow: 2.8% in March

First week
of April 2012
Despite the calm in the regulated official FX market, there is still tension over the exchange rate, which has been aggravated by the modifications in the Central Bank charter, and by over fears of the government’s advance on YPF.   The official exchange rate only rose one cent last week, to AR$ 4.41 for ret...

Liquidity continues to rise and exerts pressure on the informal dollar

Third week
of March 2012
Deposits grew AR$ 11.5 billion more than loans in the last quarter and provided banks with increased liquidity. Unlike last year, until the FX market regulations, deposits in pesos are growing faster – around 3% - and loans are slowing down – approximately 1.5% per month.

The Central Bank Charter reform will free up AR$ 47 billion to finance the Treasury

Second week
of March 2012
The bill that will modify the Central Bank Charter is zipping through Congress. It was passed quickly in the lower chamber committee. By next week the bill should be on its way to the Senate for its final approval. One important change that was made to the original project was to double the temporary advances the ...

Congress will reform the Central Bank’s charter and the Convertibility law

First week
of March 2012
The executive introduced a new bill to modify the Central Bank’s charter and some articles of the Convertibility law. The government aims is to give the Central Bank multiple goals and free up reserves for debt payments eliminating the requirement for reserves to cover the entire monetary base.

The Central Bank contracted the monetary base by AR$ 14.6 billion this year

Fourth week
of February 2012
The Central Bank purchased US$ 1.9 billion in the FX market in the first 7 weeks of the year, thanks to the FX regulations. This figure is 33% higher than in the same period last year and is 56% of the US$ 3.3 billion made in dollar purchases in all of 2011 – a year that was marked by strong portfolio dollarizatio...

The volume traded in the FX market fell strongly due to regulations: - 40% y/y

Second week
of February 2012
The volume traded in the FX market has collapsed since the FX regulations came into place. In the months before, the average volume traded in Forex-MAE - where banks operate and more than 60% of total operations take place - averaged US$ 7.5 billion per month. Since the regulations, the average fell to around US$ 4....