The Argentine government reached an agreement with local bondholders to swap nearly 200 billion pesos ($3.2 billion) of domestic currency debt. The planned swap offers new instruments that will mature between 2021 and 2024 for securities that expire this year and is part of Argentina’s goal to gain more time to make payments amid the sovereign debt crisis.
In January the Central Bank (BCRA) lowered the reference interest rate to 50%, 13 points below the rate recorded up to December 10. However, the default rate of companies with banks reached a new record of 7.8%. In the segment of families, delays were 4.2%, while arrears in mortgage loans to households were 0.6% for the portfolio in units of purchasing value (UVA) and 0.9% for the other segments.
In another day of historic falls, Argentine stocks and bonds collapsed by around 20%, while country risk, as measured by JP Morgan, jumped 12% to 4,042 basis points.
Oil prices suffered another brutal blow on Wednesday and the WTI reference barrel for May delivery sank 24.4% to $20.37, it has fallen 56% in the last ten days. The international price of Brent dropped 13.4% or $3.85, to $24.88 a barrel. In this context, the shares of YPF, Argentina’s leading fuel company, fell 26.8% on Wall Street. Its price touched a historic low of $2.57 per share: in the month it fell 67.8%, and in the year, 77.8%.
The Single and Free Market (MULC) dollar rose 15 cents to 63.3 pesos even though the Central Bank sold nearly $70 million. The tourist dollar – which carries the 30% surcharge for the Country Tax – rose 65 cents (0.8%) to 85.10 pesos, the official retail dollar rose 50 cents to 65.46 pesos. The blue dollar shot up to its historical high of 89.25 pesos. Implied exchange rates were up, and the exchange rate gap exceeded 40%, in a climate of growing risk aversion in the world. The BCRA’s International Reserves fell this Wednesday by $201 million to $44.04 billion.