The dollarized coverage required by certain business and private investor accounts due to the annual accounting closing forced the central bank of Argentina (Bcra) once again on Friday to intervene in the exchange round with the objective of keeping the monthly devaluation of the peso under control.
The monetary authority has just sold US$599 million on Thursday for regulation in the wholesale market, the largest landslide in one day since the libertarian government of Javier Milei took office the presidency, on December 10, 2023.
Part of the purchases were from automotive firms that were waiting for the elimination of the so-called “Country Tax”effective this week, a presidential decision that seeks to reorganize finances and lift in the short term the current exchange restrictions, known as “traps.”
Through the direct intervention of the BCRA, which advocates a “crawling peg” (controlled devaluation) of 2% per month, The interbank peso lost just 0.05% to 1,029.5 per US$1.
The BCRA will seek a more flexible exchange rate next year and will facilitate currency competition, the entity officially said in its monetary policy projection, with a more limited monthly correction of the currency in line with the reduction in inflationary levels.
Encouraging indicators about the Argentine economy, such as fiscal balance and a desired new agreement with the International Monetary Fund (IMF)support asset markets at record levels and help reduce country risk.
The S&P Merval stock index of the Buenos Aires stock market rose 0.7% in the opening of business led by energy stocks and financial, to lead the annual improvement with 182%.
With the elaboration of the JP Morgan bank, the country risk gave three units to 627 basis points around 1410 GMT, the lowest area since November 2018which promoted the renewal of coverage with over-the-counter sovereign bonds through the promotion of “Global” securities.
With its orthodox politics, Milei fights to stop the inflationary scourge, still at three digits annually, and urgently reduce poverty and destitution hand in hand with an economic recovery in dance.
