Mountain of pesos: the “quasi-fiscal” debt pays interest for the equivalent of 5% of GDP per year

The remunerated liabilities of the BCRA amount to almost 12,000 billion dollars, or some 60,000 million dollars at the official exchange rate. The risks of endogenous emission and pent-up inflation

February 27, 2023

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“The peso ‘bomb’ is probably the most complex outstanding issue a future government will receive from December,” warn economists at GMA Capital (Reuters)

Inflation started with a significant acceleration in 2023. The 6% reported by the INDEC for January showed a growth of more than two percentage points compared to the 3.9% of the same month of the previous year and all indicates that prices will stagnate at a rate of 100% per year, far from the official target of 60% for the full year set out in the Budget and that the Minister Sergio Massa ratified last week.

The free dollar remains at 379 pesos

He free dollar closed flat last Friday at $379 for sale in the parallel market. During the week, it recorded a two-peso increase, while so far in February it is two pesos lower than the $381 at the end of the previous month. With a dollar wholesaler earning 40 cents on the day, to $195.71 per unit, the exchange difference stands at 93.7%.

The dollar counted with liquidation fell two pesos to $367 in the final round last week while the MEP it remained at $357 per share.

The economy raised $332.4 billion on Friday through the placement of five peso bonds.

He central bank sold for $28 million and so far in February the red has reached $924 million.

BCRA sold $28 million in the market and closed the week with a negative balance

The monetary entity had made marginal purchases during the previous two rounds. In February, it records net sales of $930 million in MULC

The BCRA continued to lose reserves in February.
The BCRA continued to lose reserves in February.

He The Central Bank sold this Friday 28 million USD on the wholesale market, during a session with deals for 232.9 million USD on the cash segment (place).

Financial Week: Dollar Bonds Rebound 6%, Central Bank Continues to Sell Reserves

While the Wall Street indices lost 3%, the S&P Merval barely moved and debt securities recovered, with a country risk below 2,000 points. The free dollar rose two pesos to $379

Argentinian assets exceeded "test" wall street collapse tax
Argentinian assets have passed the “test” imposed by the fall of Wall Street

Argentina’s equities and sovereign bonds traded with improvements this week on speculative position redemptions in the face of attractive yields, while the dollar maintained modest appreciation across all bands, with a wholesale market regulated by Central Bank interventions at times of very high inflation.

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