Argentina’s financial market continues to rise awaiting details of debt agreement with IMF

By Walter Bianchi

BUENOS AIRES, Jan 31 (Reuters) – Argentine markets strengthened their upward price trajectory on Monday awaiting details on a recent agreement between the country and the International Monetary Fund (IMF) to restructure a debt of more than 40,000 million euros. Dollars.

“Investors’ response has been expectant, waiting to learn the fine print, political support and the ability to implement fiscal and monetary convergence,” said Gustavo Ber, an economist at Estudio Ber.

The Minister of Economy, Martín Guzmán, explained that the deal, with a duration of two and a half years, involves a “gradual” reduction of the fiscal deficit so that it reaches 1.9% of the Gross Domestic Product in 2023 and 0.9% by 2024, while forecasting that international reserves will grow by 5,000 million dollars in 2022, without any exchange rate jump.

After the announcement, analysts and operators did not doubt the benefits of the agreement but were cautious for the medium term.

“It will be essential that in these coming weeks a plan be outlined to achieve the proposed objectives that both the opposition and the market see as realistic and feasible,” Portfolio Personal Inversiones estimated.

* The country risk prepared by the JP Morgan bank fell 33 units, to 1,724 basic points towards the close of the local market (2000 GMT), after marking a historical maximum level of 1,969 units last week.

* Sovereign bonds on the local OTC market ended with an average improvement of 1.6%, led by dollarized issues, after soaring 5.8% on Friday. The Bonar 2030 benchmark advanced 1.9%. At the end of January, the bonds accumulated an increase of 0.6%.

* The weight in the informal or “blue” segment depreciated a slight 0.23% to 210/213 units per dollar in a quiet market, after improving 4.71% on Friday. Last week the currency in the non-regulated market marked a historical minimum level of 220.5/223.5 units per dollar.

* “The principle of agreement also lowers the chances of a discreet jump in the official dollar, where the official idea is to continue accelerating the devaluation so that it at least matches inflation,” said Roberto Geretto of Fundcorp and estimated that “however, A jump in the official dollar in the medium term cannot be ruled out.”

* The peso in the interbank segment depreciated 0.17%, to 105.01/105.02 per dollar. The central bank (BCRA) closed the day with purchases of just 2 million dollars for its reserves, which ended January with a negative balance of about 130 million dollars, commented operators.

* “In the month (January) expected company debt payments were recorded while imports remained at the average levels of the last semester,” official sources said, according to Gustavo Quintana, operator of PR Corredores de Cambio.

* In the alternative currency segments, the “cash with settlement” stock market (CCL) appreciated 227.8 per dollar and the “MEP dollar” traded higher at 214.1 per dollar.

* For its part, the leading stock index S&P Merval improved 2.99%, to a provisional close of 90,907.51 points, in a place led by the rise registered in energy shares, after soaring 5.56% the week pass.

* “The 90,000 points could act as resistance for the Merval”, estimated Alexander Londoño, market analyst at ActivTrades

* BCRA President Miguel Pesce said in an interview over the weekend that “we are going to evaluate whether a new interest rate increase is necessary,” which “will also be related to inflationary performance.”

* The monetary entity announced at the beginning of January a rise in its reference rate by two percentage points, up to 40% per year.

(Reporting by Walter Bianchi; Editing by Hernán Nessi)

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