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Montevideo, August 6th 2020 - 02:22 UTC

 

 

Bolsonaro insists Argentina is heading for “Venezuelan chaos” with the “leftist bandits”

Thursday, August 15th 2019 - 05:20 UTC
Full article 7 comments
Argentina was heading for chaos as “leftist bandits” who performed well in the primary election will follow the path of Venezuela, claimed Bolsonaro (Pic AFP) Argentina was heading for chaos as “leftist bandits” who performed well in the primary election will follow the path of Venezuela, claimed Bolsonaro (Pic AFP)

Brazilian President Jair Bolsonaro said on Wednesday that Argentina was heading for chaos as “leftist bandits” who performed well in the primary election will follow the path of Venezuela, which is mired in a deep economic crisis. Argentina's Merval stock index was down 34.47% since the start of the week.

In a sign that the market is more wary of holding Argentine debt, five-year credit default swaps (CDS) were marked at 2,720 basis points, over double Friday's closing level of 1,017, according to data from IHS Markit.

Macri's best hope of retaining the presidency is to reach a second round of voting after October's general election, but investors see that as a long shot, said Ilya Gofshteyn, New York-based senior emerging markets strategist at Standard Chartered Bank.

A candidate needs at least 45% of the vote, or 40% and a difference of 10 percentage points over the second-place runner, in order to win the presidency outright.

“The Macri administration underestimated the extent of the economic hardship facing Argentine voters,” Gofshteyn said.

Argentina's central bank sold US$248 million from its reserves to try to steady the peso by Wednesday afternoon, bringing its total sales in reserve dollars to US$503 million this week.

The bank has about US$66 billion in reserves, of which about US$20 billion are free resources that it can used to pay debt and stabilize the peso, according to an Argentine government official.

Debt payments for the remainder of 2019 are estimated between US$5 billion to US$10 billion, depending on Argentina's ability to roll over domestic Treasury bills, leaving the rest potentially to be used to intervene in the foreign exchange market

There is about US$27 billion in maturities in 2020, according to government data.

 

Categories: Economy, Politics, Argentina, Brazil.

Top Comments

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  • Zaphod Beeblebrox

    “Brazilian President Jair Bolsonaro said on Wednesday that Argentina was heading for chaos as “leftist bandits” who performed well in the primary election will follow the path of Venezuela, which is mired in a deep economic crisis.”

    Yes, the collapse in the markets and peso is because nobody wants to do business with a K-led Argentina. They don't trust them, given their track record of stealing companies and assets. So everyone is getting out in anticipation of that happening so this is just a taste of the future if the Ks get back in. Things will get worse and nobody will lend Argentina anything so the path to Venezuela is pretty much inevitable.

    Aug 15th, 2019 - 05:58 pm 0
  • DemonTree

    Don't be such a catastrophist. Certainly no one was keen to lend to Argentina after the default in 2000, yet 12 years of K rule did not turn the country into Venezuela. Unlike there, it ended with a peaceful transition of power. Alberto is more centrist than Cristina, so things are unlikely to worse this time around, right?

    Aug 16th, 2019 - 10:18 am 0
  • Zaphod Beeblebrox

    DT,

    “Don't be such a catastrophist.”

    Or realist?

    “...12 years of K rule did not turn the country into Venezuela.”

    No, but that was the direction it was headed.

    “Unlike there, it ended with a peaceful transition of power.”

    True, but CFK was reluctant. She didn't hand over the baton.

    “Alberto is more centrist than Cristina, so things are unlikely to worse this time around, right?”

    Maybe so, if he has the correct skills and policies. How much power will CFK have over him? Will he just be a puppet? Or does he have the power to fire CFK if she proves to be corrupt and/or incompetent?

    Aug 16th, 2019 - 04:54 pm 0
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