UPDATE 2-Informal Argentine peso depreciates to a psychological floor of 200 units per dollar: traders

(Update data and add details)

By Jorge Otaola

BUENOS AIRES, Nov 4 (Reuters) – The Argentine peso traded on the marginal market or “blue” fell on Thursday to its record low against the dollar, in the area of ​​200 units for sale, amid constant demand for foreign exchange as coverage of positions before the midterm elections to be held in 10 days.

The elections are considered key to the fate of President Alberto Fernández, who has been in office for two more years. The ruling party comes from a tough defeat in the September primaries (PASO) which, if the trend continues, would mean losing control of Congress.

Amid selective transactions, the local currency of the parallel square was down 0.5%, at 197/200 per unit, around 1550 GMT, against the previous floor of 199 per dollar recorded on Wednesday.

“For fear that politics will not be able to solve economic problems again, with pockets hit in their purchasing power plus growing poverty, it is normal that the peso is worth less and less. As Argentines it hurts us, but this is a repeated story” said a banking analyst.

The gap with the official exchange rate climbed to 100.1%, which further complicates the traditional informality in economic transactions that characterizes the Argentine economy.

The government downplayed it, although the market movement was not unknown.

The “blue” “is a market that is managed with its own rules (…) it reflects more political than economic expectations,” said the spokeswoman for the presidency Gabriela Cerruti at a press conference from the Government House.

“We hope that this weakness of the currency does not influence the macroeconomy,” he added.

Before elections, it is normal for Argentines to hide behind the dollar, but it is difficult to achieve it in the official market due to the existing exchange rate barriers.

On November 14, Argentina will vote to renew 50% of the Chamber of Deputies and a third of that of Senators.

* The currency in the interbank band depreciated 0.04%, to 99.95 / 99.96 per dollar, with the action of the central bank (BCRA) in favor of its reserves to avoid surges in the price. Traders expect the price to fall to triple digits on Friday.

* In other alternative exchange markets, the peso fell to 1822.5 units in the “Cash with Settlement” stock exchange, to 181.3 in the so-called “MEP dollar”, and to the average of 218 per dollar in the “Trading Segment Bilateral “(‘Senebi’).

* The S&P Merval index of Buenos Aires yielded 0.62%, to 91,520.32 units due to profit taking, after increasing 7.9% in the previous four rounds and scoring its historical peak at 92,124.21 points on Wednesday. This retraction was in line with other regional markets, following the stance of the US Federal Reserve (Fed).

* The Fed said Wednesday that it will start cutting its monthly bond purchases in November with plans to finish them in 2022, but maintained its view that high inflation will be “transitory” and likely not require a rapid rise in interest rates. .

* OTC sovereign bonds of the southern country grew an average 0.3%, after several losses in the previous days due to the doubts with which the market moves.

* The country risk prepared by the JP.Morgan bank fell five units, to 1,732 basis points, against the record of 1,745 units the day before.

(Report by Jorge Otaola; Collaboration by Hernán Nessi; Edited by Lucila Sigal)


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