Country Insights

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Peg Ain’t Crawling No More
ARGENTINA - Report 24 Jan 2014
Two days ago, the Central Bank of Argentina (BCRA) surprised markets by failing to intervene as expected; hence letting the official USDARS rise from 6.93 to 7.14. Yesterday, the spot rate closed at 7.75 after reaching 8.3 in the intraday market, which forced the BCRA to intervene (it sold $180m ...

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Coming Soon: Greater Instability
ARGENTINA - Report 15 Jan 2014
Executive SummaryArgentina is experiencing a typical inflation–devaluation spiral. The government’s fiscal deficit has climbed to 4% of GDP. Monetary issuance to close the gap explains 2013’s 32% expansion of the money base, though net monetary expansion was 22% for the year, due to the contracti...

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The Benefit of the Doubt
ARGENTINA - Report 11 Dec 2013
Executive Summary We wondered before whether the recent appointments suggested a change in economic policy or not. The departure of former Interior Trade Secretary Guillermo Moreno and the appointment of Jorge Capitanich as Chief of Cabinet suggested the possibility of a substantial change. After...

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Blowing Hot and Cold at the Same Time: Moreno Resigned, Kicillof Economic Minister
ARGENTINA - Report 20 Nov 2013
As we mentioned in our market brief of October 28[1], there were rumors that Hernán Lorenzino would step down as Economic Minister and be replaced by Vice Minister Axel Kicillof. The rumors speculated that the change would be announced once Cristina Fernández de Kirchner returned from her medical...

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The Rumor has been Confirmed: Kicillof is Economic Minister
ARGENTINA - In Brief 19 Nov 2013
As we mentioned in our market brief on October the 28th, after the mid-term elections, there have been rumors that that Hernán Lorenzino would be stepping down as Economic Minister and being replaced by Vice Minister Axel Kicillof. The rumors were that such change would be announced once Cristina...

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A New Ballgame
ARGENTINA - Forecast 04 Nov 2013
Executive Summary President Cristina Kirchner’s chances of running for a third consecutive termare now nil, after midterm elections October 27th cut her party’s representation in Congress to 32%, from 54% in 2011. The political cycle of Kirchnerism is also over: the new Congress won’t pass the re...

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Argentina 2013 Midterm Election Readings
ARGENTINA - In Brief 28 Oct 2013 1 response
When analyzing the preliminary outcome of yesterday’s mid-term elections in Argentina one should focus on two main aspects.1) The government new power balance in the Congress2) The outlook for the 2015 presidential candidates.  With respect to the first point: despite a relatively mediocre electo...

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Midterm Election Readings
ARGENTINA - Report 28 Oct 2013
As we mentioned in the Global Source Partner Direct webpage, when analyzing the preliminary outcome of yesterday’s mid-term elections in Argentina one should primarily focus on two main aspects. The government new power balance in the CongressThe outlook for the 2015 presidential candidates With ...

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Uncertain Times
ARGENTINA - Report 02 Oct 2013
This report reviews some factors that are generating political and economic uncertainty for the immediate future. They are the upcoming midterm elections, the legal battle with the holdouts, the dubious 2014 Budget, and the government’s interventionist stance. Although none seems important enough...

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Another Brick in the Wall
ARGENTINA - Forecast 30 Aug 2013
Executive SummaryAmid the collateral damage from a new judicial defeat in the NY courts, this report presents our forecasts for 2013 and 2014. Our main assumption is that the government will try to navigate until 2015 without making the necessary adjustments while, at the same time, avoiding sign...

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A new quasi-currency?
ARGENTINA - Report 22 Jul 2013
Executive SummaryThe latest deterioration of the current account surplus and the need to continue using reserves to substitute instrumented debt amortization with inflation tax, has again triggered some new policies from the government. Among them are the tax amnesty and the acceptance that YPF r...

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Q2 Health is an Illusion
ARGENTINA - Report 11 Jun 2013
Executive SummaryAppreciation of the parallel exchange rate, and a temporary fall in inflation, have moderated economic instability. But inflation and FX dynamics were mostly driven by unsustainable price controls, aggressive FX intervention in the blue-chip swap, and monetary contraction, bolste...