The Central returned to the auctions and the dollar closed at $ 38.17

September 25, 2018 - By Arturo Altman

In the middle of the official trip to the US, and after coming three sessions in low, the dollar started stable with a slight drop, but then rose a few cents, to close at $ 38.17.

 The BCRA again intervened with an auction a few minutes before closing to give a signal that does not want to move beyond the 38 to 39 pesos. The demand for the currency was related to the end of month effect and the unemployment of tomorrow. The Central auctioned US $ 250 million of which only offered 112 million to $ 37.30 in the wholesale market. The entity did not use this method since the last 14 September.

For its part, the wholesaler rose 13 cents to $ 37.35. This market is where banks, large companies and the Central Bank operate, and whose contribution ends up affecting the retail channel, where the savers buy.

President Mauricio Macri arrived in New York this weekend, where he will speak before the Assembly of the United Nations (UN) and will meet with the local president, Donald Trump.

In addition, the President is expected to meet with the head of the IMF, Christine Lagarde, while waiting for the agency to approve a new financing agreement for Argentina.

Last week, the imminence of a new agreement with the IMF, which will be known perhaps this week and that in the “attached file” would include a reinforcement of between 15,000 and 20,000 million dollars to the original contribution of US $ 50,000 million, provoked a resounding change of expectations in the financial markets.

This was reflected in an abrupt fall in the exchange rate and an acceleration in the fall of the Country Risk. The dollar, which exceeded $ 40 days before, ended Friday offering itself in the retail market at $ 38.14, a fall of 5.9% compared to the previous Friday.

The rise of bonds in dollars led to a vertical fall in Country Risk, which on Friday was at 587 basis points. Argentine stocks continued to recover ground on Wall Street, with increases of up to 5%. The Merval index already earns 13% in dollars so far this month. Numbers that brought relief to the government and President Mauricio Macri, who left for New York to speak at the UN.

Among analysts, the adoption of exchange rate bands as the main axis of the exchange rate policy – a decision already taken by the Central Bank and implemented after the signing of the agreement – fell well among financial analysts, because they understand that it will be given some predictability to the main number that Argentines look at, the price of the dollar.

But last week also had a positive impact on the market the fact that there was a strong inflow of foreign currency to buy the letters in pesos that capitalize interest. In fact this Friday the Central Bank reported that reserves grew by US $ 579 million.

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