The sharp drops of AL30, one of the main bonds used to operate financial dollars, of 2.37% and the price differences between spot and the 48-hour period, where the rate was higher than that of surety, increased distortions, to the point where the dollar counted with settlement fell below the price of the MEP dollar. There were numerous arbitrations.
The MEP dollar in spot traded at USD 28.87 - cheaper than a Russian bond of the same term - and at 48 hours it was paid at 29.33. This explains the strong demand for these bonds that moved to the price of the MEP dollar that rose 0.73% to $196.40, while the liquidated spot rose 50 cents and closed at 195.47 pesos. The MEP had started the wheel at $198 then dropped to $194 and closed at 195.47 pesos.
“The gap between the two dollars narrowed along the wheel, but as the offer appeared it subsided. When the gap reaches these non-existent levels, there are those who arbitrate who go out to buy cable and sell MEP because the exchange between the two dollars is very cheap. At other tables they told me that there were many customers offering cable,” said Nicolás Rivas, a trader from Buenos Aires Valores (BAVSA) who recalled that the gap between the two dollars at the beginning of the year was 4%. That gap is the value of the cable dollar. Last year the gap was 8% and in 2020 it reached 10%.
While the Government is happy with these quiet dollars - the “blue rose only 50 cents to $202.50” - is paying the cost on the other hand. For the second round in a row, it had to sell dollars in the wholesale market due to the demand of importers and the absence of exporters, dissatisfied with the increase in withholdings. He had to part with $15 million. On Thursday, he had sold 30 million. The reserves lost 56 million in two days and stood at USD 37,013 million. This is one of the costs of wanting to control inflation with more taxes: reserves are lost at a time when the IMF requires it to raise them.
Distortion and highlighting
The exchange rate distortion amid the agreement with the IMF and the strong general price remarking that is taking place while the government announced a single anti-inflation measure - the increase in withholding exports of soy derivatives - added further confusion to the market. Wholesalers and retailers emphasize future controls. They want to reach the price agreement with the advanced values.
Debt bonds in dollars, meanwhile, had general declines and country risk rose 20 points to 1,786 basis points. Argentine bonds paid a cost that the region did not pay for the decision of the US Federal Reserve to stop buying Treasury Bonds, because it will be a seller to absorb dollars from the place in its anti-inflation plan. With the offer of bonds by the Fed, the bond rate will rise. It is now 2.15 percent.
The emerging countries did not even notice the measure, except Argentina. The start-up ETF (EEM) on Friday rose 1.43% and Brazil's ETF (EWZ), 2.45 percent. Energy was also on the rise. The use of oil increased by 1.30 percent.
The problem for today is that oil was more than 2% up in the overnight quotes and was heading towards USD 110 dollars. Gas was up 1.08%. This is bad news for Argentina and more difficulties in lowering inflation. We must not forget that inflation in February was high despite the fact that Russia's invasion of Ukraine began in March.
Soybeans, wheat and corn, on the other hand, had slight increases of up to 0.50%. The New York Stock Exchanges were showing their indicators in decline. The most punished was the Dow Jones with 0.30%. Europe mixed ups and downs as did Asia.
The week starts difficult for Argentina.
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