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Country Insights

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From LEBAC to LELIQ
ARGENTINA - Presentation 07 Dec 2018
The government is struggling to revert the country's macro imbalances. Central Bank President Guido Sandleris significantly changed the macro policy framework, including unwinding LEBACs. However, the Central Bank must pay a high interest rate to lure banks into the new LELIQs. • Even though the...

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Monetary arithmetic revisited
ARGENTINA - Report 30 Nov 2018
Local attention these days is naturally focused on the G20 Summit in Buenos Aires, which, from a geopolitical perspective, represents a genuinely historical event for Argentina, and in particular for the Macri administration. Holding the G20 presidency and therefore hosting the annual summit is p...

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Tough macroeconomic adjustment is supported by IMF program, while more severe stagflation raises political uncertainty
ARGENTINA - Forecast 29 Oct 2018
From the second week of August until the end of September, Argentina suffered its second currency crisis of the year, with the peso depreciating from 28 to 42 pesos to the dollar. The first currency crisis had happened at the beginning of May, and lasted until the end of June, when the price of t...

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Argentina Conference Call : On the road to stability?
ARGENTINA - Report 18 Oct 2018
​Will the record IMF package and the new monetary policy be sufficient to stabilize the peso and Argentina's debt markets over the medium term? How will the current turbulence impact the 2019 elections?​

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New IMF agreement and Monetary Policy
ARGENTINA - In Brief 27 Sep 2018
Yesterday, after local market closed, Treasury Minister Nicolás Dujovne announced, together with IMF Managing Director Christine Lagarde, the new outline of the recently renegotiated Stand-by agreement. The agreement starts to have effect once the board of directors of the IMF approves it, which ...

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Central Bank in coordination with the Treasury
ARGENTINA - In Brief 25 Sep 2018
While local economic activity is practically on hold today as the government suffers its fourth general strike lead by the labor unions (GCT), and the economic team lead by Dujovne re-negotiates with the IMF the Stand-by agreement, the market received the news that Central Bank President Luis Cap...

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Crisis management
ARGENTINA - Report 10 Sep 2018
These days, Macri´s administration has faced its second significant market run against the peso since the devaluation in May, which forced it to accelerate its macroeconomic convergence plan. This comprises reversing the excessive debt levels of the Central Bank and improving the poor fiscal outl...

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​The end of fiscal gradualism
ARGENTINA - In Brief 03 Sep 2018
The economic turbulences of the last week which drove, among others, the FX rate above 40 AR$/US$, induced president Macri to give today a rather motivational address to the nation. He announced changes in its cabinet and Argentina's economic policy. In short, he proclaimed an acceleration in tim...

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Financial needs forecast update
ARGENTINA - In Brief 01 Aug 2018
In our report of July 23, with our third quarter forecasts, we have introduced some changes in Table 8, regarding the financial accounts. We raised our forecast of the financing needs from the market to USD 28.6 billion. This compares to the USD 25.9 billion in the second quarter forecast. The in...

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Next quarters, certain stagflation; afterwards, uncertain recovery
ARGENTINA - Forecast 23 Jul 2018
In retrospect, immediately after the release of our last quarterly forecast on April 20, the Argentine economy suffered a severe sudden stop in the flow of foreign capital, particularly from the beginning of May. As a consequence, the foreign exchange rate jumped from about 20 to approximately 28...

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Rough reality check
ARGENTINA - Report 13 Jul 2018 1 response
The past weeks have been a rough reality check for a government that is struggling to advance with a now “accelerated gradualism” toward a more stable and productive economy. Despite the Macri government's more predictable political behavior than its predecessors', and its efforts to unwind inher...

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​More cabinet changes and FX policies
ARGENTINA - In Brief 18 Jun 2018
This week will be an interesting thermometer to follow the market mood on Argentina. Even more so with tomorrow´s LEBAC auction, ahead of Wednesday’s formal approval of the stand-by agreement by the board of Directors of the IMF. As part of broader economic adjustments, aligned with the IMFstand-...

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Shift in the monetary policy? In short, (9am BA Time) a press conference from Dujovne after Sturzengger´s resignation
ARGENTINA - In Brief 15 Jun 2018
Federico Sturzenegger resigned as president of the Central Bank. Former finance Minister Luis Caputo, which is one of Macri’s most trusted ministers, takes the role as head of the local monetary authority. Treasury Minister Dujoven, re-units Finance Ministry and Treasury under his commands. With ...

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​Wait and see on the IMF negotiations
ARGENTINA - Report 01 Jun 2018
Two years after the new administration took power, the fiscal deficit continues to be large, and the current account deficit has been increasing. In implementing its fight against inflation the Central Bank expanded the stock of LEBACs to a level higher than that of the monetary base. In May, the...

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​Central Bank painkillers
ARGENTINA - In Brief 18 May 2018
Over the last months, we have been pointing out in our reports about the risky monetary arithmetic the Central Bank has been implementing in its fight against inflation. In short, how it has been sterilizing significant peso emissions caused by the government's dollar debt placement to finance an...