Argentine Peso and markets end the week positively; “sufficient financing in 2019” says central bank

Saturday, September 8th 2018 - 09:11 UTC

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Argentina’s central bank governor, Luis Caputo, said on Friday that government financing for 2019 was more than sufficient and that high yields on the country’s sovereign debt were “exaggerated,” prompting the peso currency to reverse earlier Read full article

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Enrique Massot
“Markets have shown optimism in Argentina...”

So good to read some positive interpretations of the country's current economic reality. Unfortunately, one swallow does not make a summer, and bad news continue to rain instead of Macri's much-touted but unfulfilled “rain of investments.”

While there are still attempts to blame the government that ceased to exist almost three years ago, the fact is, we are witnessing the results of free-market policies applied without regard for its effects on the population.

International media coverage, however, has been more than friendly as investors welcomed the possibility of investing at Argentina's high interest rates, make a quick back and then take off thanks to Macri's absolute relaxation of capital flight controls.

On June 29, Forbes was still reporting Argentina's inflation targets as “17% for 2019, 13% for 2020 and 9% for 2021.”

Now, Moody's believes economic activity in 2018 will fall by 3 per cent while the Argentine government's estimates the contraction at 2.4 per cent.

“...the central bank hiked its interest rate to 60%...a move that could hurt economic activity,” notes the MP story above.

Could hurt?

In Argentina, a reference rate of 60 per cent translates into rates of 100 per cent and more for any entrepreneur cashing a supplier's cheque--rendering any economic activity impossible.

Which for any serious economic analyst would raise numerous flags regarding the sustainability of the Macrist model.
Sep 08th, 2018 - 02:19 pm - Link - Report abuse -1
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