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Montevideo, July 16th 2019 - 16:28 UTC

 

 

IMF prepared to help Argentina stabilize exchange market volatility in election year

Saturday, March 16th 2019 - 10:15 UTC
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The announcement followed a sharp fall in the Peso, dragged down by emerging doubts about the economy and rising political uncertainty by elections in October The announcement followed a sharp fall in the Peso, dragged down by emerging doubts about the economy and rising political uncertainty by elections in October
Argentina’s minister Nicolás Dujovne revealed the treasury would sell US$ 9.6bn s from April until the end of the year via daily auctions of US$ 60 million Argentina’s minister Nicolás Dujovne revealed the treasury would sell US$ 9.6bn s from April until the end of the year via daily auctions of US$ 60 million

Argentina’s central bank wants to license market makers to help stabilize its embattled peso currency when the Treasury starts newly announced dollar sales in April. The bank hopes the market makers, dealers who agree to buy and sell at set prices, would bolster liquidity in the exchange market to help avoid the sharp gyrations the peso has suffered in recent weeks when it hit a record low of 42.5 pesos per dollar in thin trading.

“We are going to take advantage of the existence of this market auction to promote the creation of market makers in the FX market, something that does not exist now,” said a bank source. “It is something that we are talking with banks and it will most likely start together with the Treasury bids.”

Argentina’s treasury minister Nicolás Dujovne revealed on Thursday that the treasury would sell US$ 9.6 billion in dollars from April until the end of the year via daily auctions of US$ 60 million, aiming to acquire pesos to pay for ongoing expenses.

The announcement came after a sharp fall in the peso, dragged down by emerging doubts about the progress of the economy and rising political uncertainty generated by the upcoming general elections in October.

The second person said the dollar auctions “would provide liquidity at a time when it is possible that, given the uncertainty of the electoral process, the market will have this kind of dynamic,” referring to market volatility.

Argentina’s peso has remained recently within a non-intervention trading band that came into effect last year, but the central bank is concerned about volatility in a market where there can be low liquidity.

“One thing is the value (of the peso), and another thing is when the variations are very abrupt and with little liquidity,” the second person said. “That type of dynamic is disruptive.”

Categories: Economy, Politics, Argentina.

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  • Jonaz_BsAs

    Artificially propping up the peso a kin to artificially heating up your pants by pissing in them...yeah, that doesn't work. Let's talk when the real shit hits the fan sometime in 2020/2021.

    Mar 16th, 2019 - 04:19 pm 0
  • Enrique Massot

    I agree with Jonaz on this one.

    The IMF has two goals in Argentina: One is to ensure foreign creditors continue receiving their payments. The second is to continue to prop president Macri so that he has chances to get re-elected.

    Without the IMF money, Argentina would have been in default long ago. Lending more money to an inept government has the effect to tie up the hands of any future government with what this time will be, without a doubt, a “heavy inheritance.”

    In the meantime, MP may want to give some coverage to a currently developing scandal that is rocking the Argentine government, the judiciary, intelligence services and mainstream written and televised media.

    An extortion attempt on an agricultural producer has revealed unsuspected ties of Carlos Stornelli, the prosecutor in the famous “notebooks corruption” with a false lawyer, Marcelo D'Alessio, with evidence incriminating both men that includes chatroom messages, recorded telephone conversations and video recordings.

    Take a look:

    https://www.telesurenglish.net/news/Argentina-Christina-Kirchners-Prosecutor-is-Being-Prosecuted-for-Espionage-Extortion-20190316-0013.html

    Mar 17th, 2019 - 01:44 am 0
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