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Instability and devaluation: dollar year



The dollar price closed in 2018 with an increase of above 100% and the Merval index of the Buenos Aires Stock Exchange accumulated in the same period, a marginal increase of 0.75% in measuring in pesos and a decline of 50.2% in dollars, in the context where inflation the last twelve months will be around 48% and where the level of monetary policy – after reaching a maximum of 74% in the first days of October – ends the year at 59.25%.

The dollar at the retail level fell 1.40% today to close the day at $ 38.85 pesos based on the daily average omitted by the Central Bank. In this way, throughout the year, the US currency recorded an increase of 105%, because the last working day of December 2017 was $ 18,921.

In the wholesale segment, the dollar fell 60 cents today compared to the previous day to $ 37.70, with an increase of more than 101% over the past twelve months.

The highest price of the US currency was recorded on September 18, when it closed at $ 40,502, a day in some of the banks was negotiated around $ 44.

Experts agree that the trigger was initially a message from President Mauricio Macri regarding renegotiation of an agreement signed in June with the IMF, which had not yet been approved by multilateral organizations, and objections coming from Washington to the task Luis Caputo had as head of the Central Bank.

Mauro Morelli, analyst at Rava Bursátil, said that 2018 was "a year to be forgotten, where a brutal devaluation of the peso had a very hard impact on the expectations of the already weakened Argentine economy."

"On Wall Street, Argentina's ADR suffered a very strong blow that year, with losses ranging from 30% to more than 70% in dollars, literally disbursing almost all Argentine companies registered in New York," he added.

Morelli said that "the key to finance for 2019 is still: fiscal solvency, reduced inflation and exchange rate stability", something that is impossible to separate from election questions – in August PASO will be implemented and in October presidential elections – and the consequences that come from it, especially before the question of the sustainability of Argentine debt.

The variable that gained momentum in the final months of 2018 was the state risk measurement prepared by JP Morgan, which in the previous days reached a record 837 basis points, the highest since 2014 to date.

The increase in over-rate paid by the state in terms of medium and long-term debt impacts on the price of state bonds such as discounts in dollars under Argentinian law, which fall by almost 40%, or Argentine National Bonus (AO20). ), with red more than 13%.

Together with local factors in the Argentina crisis, the international context was also influenced by the Fed's rate hike and the estimated new increase for 2019, and the consequences of the commercial war being released between the US and China.

Sabrina Corujo, from Porftolio Personal, said that the annual balance of what happened on the Buenos Aires Stock Exchange "broke all expectations expected a year ago."

The specialist alludes to this method at the closing rate which in the first days of January registered Merval, when that number reached the last record in 35,145.45 points.

"The sharp depreciation of the currency triggered by the crisis of trust in the government was responsible for influencing both the stock market and all real variables of the Argentine economy," Corujo said.

Looking ahead to 2019, analysts believe that "the worst has happened and the year is closed under the climate of exchange rate stability, and interest rates have declined slightly".

Theme

  • balance
  • exchange market
  • dollar
  • sandleris
  • central bank
  • bcra


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