Given the drop in revenues, the national government will create a financial emergency program of 120 billion pesos ($1.8 trillion) to assist the provinces. It will distribute the funds according to the percentages provided in the co-participation law and also through specific loans requested by each governor.
The tourist dollar – with a 30% surcharge for the Country Tax – rose 15 cents this Tuesday to an unprecedented 87.22 pesos. The BCRA’s International Reserves increased this Tuesday $17 million to $43.7 billion and already accumulate five consecutive days with positive variations.
The S&P Merval of Bolsas y Mercados Argentinos BYMA dropped 0.9% to 26,696.1 units. Dollar bonds deepened the falls of the previous day and lost in some cases up to 9.4%. Argentina’s country risk, as measured by JP. Morgan, rose 1.8% to 3,652 basis points.
The BCRA’s International Reserves rose Monday to $52 million and $43.7 billion. The tourist dollar -which carries the 30% surcharge for the Country Tax- rose 16 cents this Monday to 87.07 pesos. In the Single and Free Market (MULC), the currency rose eight cents to 64.99 pesos. The Liquidation Counted Dollar (CCL) – obtained from the purchase and sale of shares or bonds – rose 1.65 pesos to 90.78. Therefore, the gap with the wholesaler was 39.6%.
In a new attempt to reconstruct the debt curve in pesos, the Economy Ministry reported that on Monday it obtained 7.36 billion pesos ($113 mn) in a tender for Treasury Bills.
As a result of an adjustment for the economic impact of the arrival of the coronavirus in the country, consulting firms and financial institutions estimate a 4.3% drop in Argentina’s GDP in 2020. The figure comes from the Market Expectations Survey (REM) carried out by the Central Bank (BCRA) in March.
The Government of Buenos Aires presented a series of guidelines to external private creditors, for information purposes, to recover the sustainability of public debt in dollars under foreign legislation. It seeks the restructuring of $7.1 billion. It was not yet a formal offer.
Dollar securities under local legislation collapsed by up to 14%, while foreign-regulated instruments closed in positive territory by up to 3.6% after the government postponed payment of up to $10 billion of debt under Argentine legislation until the end of the year. Argentina’s country risk, as measured by JP. Morgan fell 2.6% to 3,588 units. The leading S&P Merval index of Bolsas y Mercados Argentinos (BYMA) rose 1.6% to 26,922.59 units
The Government, using a decree, has decided to defer the payment of interest and capital amortization services on the national public debt, instrumented through dollar securities issued under the law, until December 31, 2020. In total, payments of some $9.8 billion will be deferred, with only some $3.5 billion of foreign currency securities issued under international legislation.
Economic analysts estimated that even if Argentina managed to keep the coronavirus at bay, the economy would fall by at least 4% this year, as it is losing some $500 million a day amid this crisis. The impact would be more pronounced in the second half of the year. If the debt restructuring is not approved, it would further worsen short-term economic activity.