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September 14, 2021

The Week at a Glance

Argentina: The Current Rate of Intervention Is Unsustainable

BY Alejandro Giacoia, Andrés Borenstein, Miguel A. Kiguel, Isaías Marini

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( 2 mins)

The BCRA sold more than 800 million dollars since the FX market changed from positive to negative on August 26. There are several factors behind that. There were companies that canceled debts in dollars, banks that had reduced their foreign currency position a few months ago and now recovered it, purchases at the beginning of the month from retailers and a decrease in the liquidation of exports, something totally logical considering two factors: the seasonality of the harvest imply less dollars available in the second semester and the devaluation expectations suggest that it is convenient to wait. Between August 3 and September 6, the firms canceled debt in dollars for 291 million. In July that number had been just 36 million. In the case of banks, between January and July it had reduced its holdings of dollars by 574 million.

How Much Fuel Does the Recovery Have?

The big upset in the primaries, with opposition wins in all main districts, could impose the need for the Government to take additional measures to prop up consumption and economic activity on the road towards the general elections in November.

The Secrets That Leliqs Hide

The Ministry of Economy, Martin Guzman, described last week the AR$ 4 trillion that the Central Bank holds in interest-bearing liabilities (Repo + Leliqs) as a “situation that is dysfunctional for the economic system.” What he wanted to say? And, even more, if it is dysfunctional as it maint ains, why is any progress being made to lower this “mountain” of short-term securities that many point out as a “time bomb”.

Argentina: Open for Business

( 2 mins) “High-Beta” is one of the most used analogies to describe the Argentine economy. There is a mathematical reason for that. Argentina is not the economy with the worst performance in a medium-term perspective compared to

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Argentina: Waiting for the budget

( 2 mins) On September 15, 3 days after the primary elections, Congress will receive from Martín Guzmán the budget bill for 2022. Although the budget has not traditionally had the importance in Argentina that it usually has

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