The Financial Conditions Index (ICF), prepared by the Argentine Institute of Finance Executives and the consulting firm Econviews, deteriorated by 15.6 points to -94.1 points. The sub-index of external conditions explained the deterioration of total rate, by falling 12.1 points per month and interrupting five consecutive monthly advances, standing at 22.8 points (comfort zone). The local conditions sub-index deteriorated slightly during the month, the increase in country risk and legislation, added to a more significant expected depreciation explained the worsening. Domestic conditions remained very stressed, at -116.9 points.
This Monday, the Central Bank of Argentina (BCRA) International Reserves fell $56 million to $44.3 billion. The fall is less than the previous days; last Friday $180 million had been lost, which rounded off a weekly decrease of almost $500 million. The wholesale dollar, which operates in the Single and Free Market (MULC), rose 14 cents to 63.04 pesos, or 0.2%. Due to strict exchange controls, the dollar slid slightly in the proportion set by the BCRA.
Argentine stocks and sovereign bonds plummeted by up to 35% on another Black Monday, while country risk exceeded 3,500 basis points, in response to fears about the impact on the global economy of the pandemic hitting the planet.
Amid the paralysis caused by the coronavirus and the collapse of the international markets, the Argentine government continues with its strategy to renegotiate the substantial public debt, for about $70 billion, and called for a new exchange for next Thursday. The objective is to alleviate the maturity curve; the Ministry of Economy will place inflation-adjustable bonds with terms of between 1 and 4 years.
After showing an apparent downward trend in the first two months of the year, inflation will accelerate to around 2.5% in March, according to estimates by the consulting firm Ecolatina. Education and Clothing will lead to an increase.