When It Rains, It Pours: the Economy in Times of Coronavirus
After two weeks of gradually ramping up social distancing measures, on March 19th President Fernández announced a nationwide mandatory quarantine. Although the quarantine ends on March 31st (coincidentially the set deadline for the debt restructuration) the evidence from Asia and Europe suggests it may be necessary to extend the measure. Days before, Minister of Economy […]
The Debt Negotiations Are Heating Up
The debt saga started with the Province of Buenos Aires (PBA), which faced the maturity of the BP21 (NY law) for USD 250 million at the end of Jan-20. The province tried to defer the payment from January to May. Despite sweetening the original offer and extending the deadline to accept the deferral several times, […]
Debt: A Time of Critical Decisions
While Alberto Fernández won the Presidential election, as expected, the final results brought some relief to the Macri camp, especially because he lost by a much smaller margin than in the primaries (only eight percentage points compared with 17 points in the primaries). In addition, Juntos por el Cambio (Macris coalition), won the provinces of […]
The countdown for economic decisions has begun
The announcement of debt reprofilement and FX controls last month were effective to moderate the fall in international reserves and contain the depreciation of the official exchange rate, which was only 3.7% since then. The CB added new FX controls on October and the Peso stands nowadays near 58.30. For individuals it limited the arbitrage […]
Dollars and Debt: what’s next?
The primaries have clearly marked a turning point for financial stability and economic performance: investors were in shock and confidence all but disappeared, in a matter of hours Argentine credit spreads went through the roof, all financing dried up and the result was that Argentina could not rollover its debt. Confidence was the name of the […]
Surprising election results. What comes next?
The landslide victory of the Fernandez ticket in the primaries has been an unexpected result that shook financial markets and introduced a high level of uncertainty regarding the evolution of economic and financial variables during the transition to December 10th, when the inauguration of the new president takes place, and about the economic policies that […]
The exchange rate and the countdown to primaries
A trade deal between the European Union and Mercosur was finally announced in late June. It should drive the creation of trade, the access to cheaper inputs, the specialization to a higher scale of certain sectors and a greater integration of local firms to global value chains. The agreement promotes a greater regulatory harmonization, integration, […]
Surprise VPs: what does it mean for the economy?
May was a positive month regarding the FX front after the CB announced on April 29th that is allowed to intervene in the FX market discretionally and the Peso reacted positively: it fluctuated around 45.00 ARS/USD since then, even when other emerging-market currencies were depreciating. So far, the monetary entity did not sell international reserves. […]
FX intervention does make a difference
On the monetary front, the contractive bias of the program was first reinforced by freezing the floor and ceiling of the non-intervention zone (NIZ) at the current levels until the end of the year and by preventing the purchase of reserves until June 30th. However, since end-April the Central Bank is allowed intervene in the […]
The political forces preparing to campaign
At the beginning of April, FX instability returned and the Peso weakened to almost 44.00. The Central Bank used dollar futures and increased the interest rate to 68.4% in order to contain the depreciation. FX proceeds from the harvest and Treasury’s FX daily auctions for USD 60 million helped to stabilize the currency. As an […]