The Argentine primary next Sunday when the different parties will choose their candidates for the midterm elections of 22 October, and the possibility of a comeback of ex president Cristina Fernandez, and all that she represents, has cost the Argentine central bank so far over a billion dollars in the last ten days.
In effect, as public opinion polls indicate, since the ex president and the populist policies that she embodies have good chances of winning the Buenos Aires province Senate bench, defeating the incumbent sponsored by president Mauricio Macri, this has triggered a strong reaction in the markets and caution from business and investors, highly sensitive to risks and surprises.
The US dollar has recently climbed steadily from 17 Pesos and has lately been trading slightly above the 18 Argentine pesos, which seems to be the benchmark for Macri's economic and financial team, and the exchange rate at which the budget has been estimated.
To counter this effect, the central bank has been actively intervening in markets pumping sufficient dollars to keep speculation in the range of the 18 Pesos. This has already surpassed an accumulated one billion US dollars, although the bank has more than sufficient reserves to face the challenge, a situation quite different from when Cristina Fernandez and her dollar clamp policies ruled Argentina.
However next Sunday the different parties will choose candidates and the big dispute will take place two months later, 22 October. But as polls indicate Cristina Fernandez could collect some 34/36% of votes cast in the crucial province of Buenos Aires, the largest electoral circuit of the country with over 35%, the message is significant and has a rippling effect.
Since opinion polls in Argentina, except a very few, are of questionable reliability, and the race for the Senate bench in the Buenos Aires province is tight, an average of recordings from different pollsters over the last few months shows that Cristina Fernandez has a floor of 27.8% and a ceiling of 38.6%, while Esteban Bullrich, the incumbent, 22.1% and 39.41%, and the third in dispute, Sergio Massa, 11.29% and 26.30%.
Despite all the speculation about Mrs. Cristina Kirchner comeback it must be taken into account that she is running on her own ticket, Unidad Ciudadana, not with the main Peronist party, and this is because her leadership since leaving office has been disputed given all the corruption allegations and court cases. So the fact Cristina Fernandez could return to the Senate, next October, she is not necessarily a cohesion factor, rather the contrary.
This would ensure that the opposition in Congress to the Macri administration will remain splintered giving it, most probably, a greater governance than in the last two years, because all polls point to a good showing of the ruling coalition in most provinces, despite a possible stumble in Buenos Aires province. .