When Alberto Fernández
's decision to decline his re-election bid was released on Friday
, Argentine bonds abroad had an initial jump of 3.5% abroad.
What did the market read?
That this decision makes the path for Minister
Sergio Massa
more open to launch his presidential candidacy? Or perhaps, that the collapse of the bonds is historic to the point that they yield up to 50% in dollars as a result of holding a price of default.
The exchange rate crisis of the week that was reflected in a 12% rise in free dollars
against the background of a
strong increase in the volume traded
in global bonds to carry out cash dollar operations with liquidation, one of the clearest indicators that the
The wholesale
coverage process is in full expansion.
The most compromising data is that the Government
has not yet achieved a smooth settlement
of foreign exchange after having implemented the agricultural dollar.
The scheme was announced on April 5, before the spread of 7.7% inflation for March.
This data dented the expectation that $300 could be an attractive exchange rate for soybean producers, and even more so later, when the run on the dollar marked
a free exchange rate of $454.
The
tugs between the cereals and the producers,
who refuse to part with their grains, are added to those of the Government over the cereal companies that argue that they do not have grains to liquidate.
The aggravating factor for the Economy is that the former head of advisors to Alberto Fernández,
Antonio Aracre
, who was ejected from the Casa Rosada, had told the President that the
agricultural dollar was unattractive
for producers, even when the fields needed to sell the grains. to be able to pay debts and inputs for the next campaign.
Minister Massa was successful with the
"soybean dollar 1"
that generated export settlements for more than US$7,000 million and also with "soybean 2" with more than US$3,000 additional million, but now "agro 1" (guaranteed by the IMF) supports
crossed effects due to the spillover of the drought, the inflationary blow and the political crisis of the ruling party
.
It will be difficult for the Government
to maintain that the devaluation of the agricultural dollar will have been the last
, even when the pressure on the countryside increases.
On the dollar side, cereal companies once again reduced the estimate for the soybean crop by 2.5 million tons, which would now reach 22.5 million tons.
Regarding the pesos, doubts are growing about the
ability of the Central Bank to continue to control the peso market
by raising the interest rate for time deposits and liquidity Bills.
With a
nominal rate of 81% per year
(the previous one was 78%), the effective yield of a fixed term rises to 119% in a context in which inflation is above 100%.
Will the prize be enough to contain the savings in pesos?
It is worth remembering that each increase in rates that the Central has available translates into an
increase in the interest
that must be paid for the placement of Leliqs in the banks that, together with the repo operations, imply having to pay interest on a stock of debt of $ 12.5 trillion.
Issuance needs continue to grow.
The latest report from ABECEB, the consultant for former minister Dante Sica, focuses on the deterioration of the pillars of Massa's "endurance plan".
And he mentions that
the real exchange rate is 20% behind
, that the Central Bank cannot
defend the value of the peso
and that the State displaced companies and consumers from available credit:
"Private credit fell almost two points in one year percentage of GDP".
The fact that the State keeps increasing portions of the available credit goes hand in hand with the certainty of economists that
this year wages and pensions will lose the race against inflation
, but these days that is taking second place in the priorities of the government . Government and exchange rate instability takes center stage.
Massa has an open front with the IMF in the renegotiation of the fiscal deficit target (it must drop from 2.4% to 1.9% of GDP and compliance is difficult) with the aggravating circumstance that Kirchnerism continues to criticize the Fund even when it depends
on the agency dollars
.
But for the minister, the priority will be to achieve results with the agricultural dollar.
Without dollars, the fate of any government is cast and recent Argentine history is full of experiences.
The ABECEB report concludes by saying: "McKinnon, one of the economists who has most studied the phenomenon of financial repression (backward dollar, stocks, late tariffs) in emerging countries, stated that deactivating repression is like walking through a minefield
.
"
You will have to be forewarned.
look also
Balance of a hectic week: the dollars marked rises of 10 to 12% and further agitated the political crisis
After Alberto's decision, Argentine bonds rise more than 3%, but the dollar counted with liquidity exceeds $440