Day: October 30, 2019

Argentina’s Central Bank accelerates disarmament of liquidity letters and restricts purchase to banks

The Central Bank has announced that from Friday 1st November the banks that integrate part of the reserve requirements on sight deposits with the purchase of Liquidity Letters (Leliq), will only be able to do so with 5% of the total of these placements in Treasury Bonds (BOAT) and the remaining 40% in pesos. That means eliminating the possibility of integrating 10 percentage points of 45% that applies to reserve requirements on demand deposits at 0%. With this decision, the Central Bank takes another step towards the disarmament of the snowball of the Leliq, as the market consensus had baptized that instrument of liquidity regulation, which has been growing since August 28, when they had amounted to $1.3 trillion, equivalent to 40% of foreign exchange reserves and more than 104% of the monetary base.

Alberto Fernández seeks to rebuild regional integration

On his first international trip as president-elect, Alberto Fernández will meet with President Andrés Manuel López Obrador on Monday in Mexico City. Analysts consider the trip as a clear message to Brazil, traditionally the first destination of an elected president in Argentina, and to Washington. Afterwards, on Friday, Fernández will participate in the second Puebla Group meeting, a group of progressive leaders gathering in Buenos Aires. In a moment of regional upheaval and crisis of the neoliberal models, the president-elect will take the initial steps towards the idea of integration that not long ago served to create organisms such as Unasur and Celac, now abandoned.

More than $100bn of Argentine debt hangs in the balance ahead of a probable restructuring

Investors in Argentina’s sovereign and Province of Buenos Aires debt expect to be fully organized into two separate creditor committees sometime in the first two weeks of November, an investor told IFR. Bondholders are currently organizing the two committees, which are expected to exceed 25% of bondholders of the debt, the investor involved in the process said. More than US$100bn of Argentine debt hangs in the balance ahead of a probable restructuring. The country has around US$44bn of loans with the International Monetary Fund.

Argentina’s markets jumpy as President-elect Fernandez plots new path

Argentina’s President-elect Alberto Fernandez pledged to lead the country in a new direction as financial markets jumped around with investors grasping for any signs of the Peronist’s plans. On Tuesday the peso currency ARS=RASL and over-the-counter bonds closed up after earlier falls, while the Merval stock index .MERV dipped slightly on profit-taking. The black market peso jumped over 10% on month-end demand for local currency after a pre-election rush for dollars last Friday.