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Saturday, December 10, 2022

Reserves fell due to yuan devaluation and inflation-adjusted bonds

Adrian Skander
Adrian Skander

The fall of the yuan has once again troubled the government. The Chinese currency, which represents 52% of the Argentine Central Bank’s reserves, lost 0.25% of its value and closed at 6.9070 against the dollar.

For this reason and for dollar purchases out of a quota of USD 200 per customer, which was quoted at $240.67, Reserves lost USD 90 million and are at USD 36,641 million, In the last 5 rounds, reserves declined by US$387 million, despite the fact that it bought US$44 million in the wholesale market during that period.

The weakness of the yuan against the dollar complicates official plans. Looking at the advent of inflation, which will be a little over 7% in August, they are looking to raise the interest rate to between 5 and 6 points.

This position overtook the market and This decimated the fiscal dollar and increased inflation and devaluation hedged doubles on CER-adjusted bonds and creditor’s choice.

In Bonsar, 2.41% ending 2023 and 2024, up 4%. There was an increase of up to 2.41% in double bonds, as in the case of TDS23 which was expiring in September next year. The double dollar and peso issued on August 12 have gained more than 10%.

Investors see an opportunity in the rigors of rates to operate in pesos, turn to indexed securities, and then return to the dollar. (carry trade), Thus, despite the decline in bonds with which the financial dollar is traded – the AL30D lost 0.05% and the GD30D, 0.95% – prices crashed, The MEP dollar lost $4.75 (-1.5%) to $278.73 and cash with settlement lost $4.09 (-1.4%) and closed at $288.74. The turnover was around US$170 million, a lower-than-normal volume. This market regularly trades just over USD 200 million per day.

The “blue” fell sharply from $5 to $285 and the dollar was up 30 cents at $139.05 in the wholesale market. The rate of devaluation is maintained and exchange delays accelerate the decline in reserves as the devaluation of the real in Brazil continues. Yesterday the dollar was trading at 5.24, up 1.14% against the real. The trade balance deficit with Brazil so far this year is USD 1,960 million. The greater the real devaluation from Brazil due to the disparity in exchange rates, the greater the increase in imports.

Debt bonds remained balanced in dollar terms and country risks remained at 2,388 basis points.

The stock exchange traded $1,492 million, which is a modest amount. Major stock indexes rose just 0.06% in the S&P merval peso, but gained 1.50% in the dollar.

ADRs—certificates of holdings of shares listed on the New York Stock Exchange—traded slightly higher than the previous day. Turnover reached $4,492 million Where rises in a wheel, they stand out Adenore (+6%) Y BBVA (+3,1%).

for now Investing in Peso continues to win, A new increase in rates and the proximity of higher inflation strengthen the position of those who choose dollar-indexed bonds and provincial titles in the US currency with a higher rate of return.

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