The market reacted to Caputo’s announcements: the blue dollar exceeded $1400 and stocks and bonds fall

After last Friday’s announcement by the national government on the transfer of the debt from the Central Bank to the national Treasury, the financial market reacted with a rise in the dollar and a fall in bonds and stocks. In addition, the Country Risk went above 1500 basis points. In this way, the U.S. currency advanced about 40 pesos and closed the day trading at 1405, which is a new all-time high. Thus, the gap with the official wholesale exchange rate stands at 52%. This adds a new headache for the government of Javier Milei, because neither the approval of the Bases Law and the fiscal package, nor the announcements of the Minister of Economy, Luis Caputo, and the president of the Central Bank, Santiago Bausili, were able to control the US currency. Then, in the stock market, the MERVAL operates with most of the shares in decline and registers a fall of 0.7% and public debt bonds also show mostly negative balances, with the AL30 losing 0.8%, which causes the Country Risk to jump. In addition, the ADRs of Argentine companies listed in New York are the ones that suffer the most, with falls of up to 3.8% in the case of Banco Superville, followed by declines of 3.5% in BBVA and 3% in Macro.This mechanism includes the issuance of a Bill that will have a coupon with an interest rate managed by the BCRA. but that it must be paid by the National Treasury. This exposes banks to a greater risk of default by the Argentine State, which causes the banks’ share prices to fall. In response to these measures, the Central Bank and the banks held a first meeting at the headquarters of the monetary authority to define the characteristics of this mechanism.

Original source in Spanish