Sunday , October 17 2021

The Central Bank uses the best financial climate and accelerates the rate cut – 01/02/2019



The central bank – and then the government in general – continues to use it Tail Wind blowing in the financial markets and helping you to support the monetary and exchange program that began in October.

After an extremely positive January financial variable, February started with a similar trend. This allowed the central to deepen the decline in the monetary policy interest rate – what comes from every offer of liquidity letters and at the same time buy more dollars consolidate reserve stocks. And everything, despite its main goal: to follow the monetary base zero expansion plan.

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The summary of what happened yesterday was as follows.

– Liquidity letters in the daily offer (leliq) absorbed 19 300 million pesos, and thus the interest rate charged by the banks – equal participants in this market – remained 52.44%. This figure has already fallen by about seven percentage points from 59.25% paid by the Center in the last 2018 round. And it is more than 20 points below the maximum of 73.52% that it paid on October 8 when it made the First Steps – in the midst of high uncertainty – a program agreed with the International Monetary Fund.

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– In the foreign exchange market, the wholesale dollar continued to trade below the exchange rate range, which allowed the central bank to go abroad. Although the daily purchase limit was increased to 75 million, yesterday was $ 50 million. As dollar purchases started with the exchange lane scheme, the Central Bank has accumulated $ 610 million. In February, a purchase limit of $ 1,100 million was set.

– Despite the consistent demand from the Central Bank, the dollar, which was mentioned, remained below the exchange rate. The exchange rate of the retail currency at which the common company participates is closed $ 38.30, which is 54 cents below The wholesaler discussed this $ 37.17, well below the lane or non-intervention zone, which was $ 37.88 this Friday.

So far, what happened in the central dollar and in the interest rates of the pesos. But other market situations also occurred.

Most importantly, the so-called "country risk" fell sharply again. Se placed at 654 points compared to 674 the previous day and well below 832 pointsso that it was marked at the end of 2018. This was possible because of the demand for Argentine bonds denominated in dollars, which is still relatively cheaper than the peak reached in January 2018 before the crisis began. Dollar and Lebac.

In any case, it is worth remembering that the risk of the Argentine state is more than tripled with other countries in the region. For example, Brazil has 238 points, Colombia in 193, Uruguay in 179 and Peru 119.

The stock market also benefits from tail wind. The stock exchange rose again and earned a 21% return this year under the MerVal index. At the beginning of the recovery, the bank shares that have won or recovered after heavy losses in 2018 – 30.

In addition to fulfilling the program agreed with the IMF without any derogation, and that the Treasury is contributing to the primary fiscal deficit 0 at the end of 2019, the market they acknowledge is the financial summer remains in place outside of Argentina.

And precisely, in two factors: The Federal Reserve Decision does not touch on interest rates and clear signs of detention in a commercial "war" between China and the United States. What was against last year is now playing.


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