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Default or Not Default
ARGENTINA · Forecast · 06 Jul 2014

Executive Summary This report presents two scenarios: a first scenario in which an agreement with the holdouts is reached avoiding a new default; and a worst-case scenario without agreement and default. Needless to say, in the default scenario we expect macroeconomic instability to increase signi...

​Upping the ante… once more.
ARGENTINA · In Brief · 26 Jun 2014

Economic Minister Axel Kicillof, just announced that the government made today the transfer to pay the coupons of the Discount bonds which mature on Monday. In total, the payment was close to close to 1bn USD, out of which USD 539nm where transferred to the BoNY to be used to honor debt under US ...

Swapping out of US jurisdiction
ARGENTINA · In Brief · 17 Jun 2014

During today’s press conference, Economic Minister Kicillof, reinforced the comments made last night by president Cristina Fernádez de Kirchner, in the sense that Argentina cannot honor the debt obligations that emerge from the Griesa’s rulings (because of the consequences it has on the remaining...

​A Presidential stance against Moral Hazard
ARGENTINA · In Brief · 16 Jun 2014

As might have been expected, at least from a Game Theory point of view, tonight’s presidential speech was not very precise regarding the future steps the government is going to take, after earlier today’s confirmation that the US Supreme Court was not going to take Argentina’s appeal. In her spee...

US Supreme Court rejects Argentine Case
ARGENTINA · In Brief · 16 Jun 2014

Without further consultations, the US Supreme Court announced today that it will not consider Argentina’s appeal against the rulings of judge Griesa in favor of Holdouts. Even though Argentina is expected to request a rehearing of the case, the chances that the Supreme Court changes its mind are ...

Good News on Debt, Despite Bad Activity Data
ARGENTINA · Report · 03 Jun 2014

Last Thursday, the Argentine government announced that after long and complex negotiations it finally reached a first firm agreement with the Paris Club regarding its outstanding debt, which had been in default since 2002. The normalization of its default position with the Paris Club is a positiv...

Finally an agreement with the Paris Club
ARGENTINA · In Brief · 29 May 2014

The government announced today that it finally reached, after long and complex negotiations, a first firm agreement with the Paris Club regarding its outstanding debt, which Argentina last defaulted in 2002. The current amount under negotiation stands today, based on April the 30th, at USD 9.7bn....

Dangerous Monetary Arithmetic
ARGENTINA · Report · 28 Mar 2014

Executive Summary In the midst of yesterday’s downward revision of the preliminary 2013 GDP growth figure from 4.9% to 3.0%, we review some of the latest changes in macroeconomic policy. Over the past few years, in particular since Cristina Fernández de Kirchner took office, it has proven helpful...

Time to Pay the Piper
ARGENTINA · Forecast · 20 Feb 2014

Executive Summary After a sharp devaluation of the peso in January (23% m/m and 60 % y/y) the Central Bank launched a series of measures allowing for temporary stabilization of the money and FX markets. First, the Bank reinforced the sterilization policy, by raising interest rates by more than 10...

Capital Control Relaxation: Forced or Planned?
ARGENTINA · Report · 28 Jan 2014

At yesterday’s daily press conference, Chief of Cabinet Jorge Capitanich, chaperoned by the Head of the local Internal Revenues Service (AFIP) Ricardo Echegaray, gave some details of the new relaxations to capital controls, which were hastily brought forward last Friday after the significant slip...

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 ...

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...

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...

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...

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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