Argentine Peso Collapses 9% to All Time Low As Crisis Deepens

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  • #16636
    Helmholtz Watson
    Participant

    Argentina’s currency the Peso collapsed Monday 9% to…

    [article]804[/article]

    #16637
    MoneyNeverSleeps
    Participant

    Looks like another case of bankers leading a naïve government into a trap and money bit and then flogging that as an investment opportunity to fast money and naïve investors. What happens when there is no moral hazard – sad.

    #16643
    TradersCom
    Keymaster

    Argentina’s peso opened stable at 25 per U.S. dollar on Tuesday morning after country’s central bank offered to sell up to U.S. $5 billion in a bid to stop the peso’s slide, traders said.

    #16644
    TradersCom
    Keymaster

    Argentina’s peso opened stable at 25 per U.S. dollar on Tuesday morning after country’s central bank offered to sell up to U.S. $5 billion in a bid to stop the peso’s slide, traders said.

    #16968
    Helmholtz Watson
    Participant

    International Monetary Fund (IMF) has agreed to lend Argentina $50 billion

    Under the deal, which needs to get final approval from the IMF board, Argentina will have to cut its fiscal deficit. Economic growth is now forecast at 1.4 percent in 2018 and 1.5-2.5 percent in 2019, down from expectations of more than 3 percent for both years.

    Many Argentines blame austerity measures endorsed by the IMF for a devastating economic crisis in 2001-2002.

    #17727
    TradersCom
    Keymaster

    Argentina Central Bank Unexpectedly Hikes Key Rate to 45%

    Via Bloomberg

    – Pledges to hold rate at that level until at least October
    – Cancels daily dollar auction, unveils plan for Lebac reduction

    Argentina’s central bank unexpectedly hiked its key rate and unveiled a plan to gradually eliminate the stock of its short-term notes as the peso slumped to a record low amid a broad selloff of developing nation assets.

    The bank raised the 7-day Leliq rate 500 basis points to 45 percent, according to an emailed statement. The central bank pledged to hold the rate at this level until at least October. The government canceled its daily dollar auction as well.

    The most recent selloff in the peso –the more-than 6 percent drop of the past two days was spurred by concerns Turkey’s problems would infect other emerging markets. Argentina was seen as among the most vulnerable economies.

    “They had to do something against contagion,” said Siobhan Morden, the head of Latin America fixed income at Nomura Holdings. “You have to do what you can to minimize financial contagion to the real economy.”

    The decision was the fourth surprise rate hike by the central bank this year as inflation refuses to slow. The currency has plunged more than 35 percent this year, the second-worst among emerging market nations after Turkey’s lira. The selloff in Argentine assets that began in April forced the government to turn to the International Monetary Fund for a $50 billion credit line. Still, the economy is set to enter a recession this year.

    Last week, the peso fell the most since June, as Turkey’s worsening financial issues dragged emerging market currencies down. The peso was down 2.8 percent Monday to 30.1 per dollar. The peso recovered from its lows of the day after the rate announcement. It was down 2.4 percent to 29.98 per dollar on Monday afternoon after falling as much as 3.6 percent.

    Source: https://www.bloomberg.com/news/articles/2018-08-13/turkey-s-collapse-sinks-emerging-markets-on-manic-monday

    #17923
    MoneyNeverSleeps
    Participant

    Here we go again despite officials in Argentina and at The IMF comments and the promise of a USD 50 billion IMF bailout being accelerated the Argentine peso continues to collapse, inducing the next wave of inflation, and it could shortly usher in the next recession and depression.
    The peso has crashed another 4% today to a new record low above 32.5/USD

    #17933
    Helmholtz Watson
    Participant

    Pierpont Morgan @pierpont_morgan

    Argentina cds blows out, +45bp to 700. Won’t be long before Turkey trades at same level.

    #17935
    Helmholtz Watson
    Participant

    Argentina central bank hikes 7-day benchmark rate to 60% from 45%

    Central bank said it won’t cut the rate until December.

    Panic feeding on itself – Argentina’s peso is now down 13.4%

    #20103
    ClemSnide
    Participant

    Like most of these stories it is just a matter of kicking the can down the curb and bankers getting whatever they can before its all over.

    Argentina’s peso fell over 4 percent to close at 42.5 pesos per dollar on Thursday more challenges for President Mauricio Macri ahead of elections in October.

    The peso has lost over 11 percent in 2019, renewing fears after a sharp sell-off in 2018 saw the Argentine currency lose around half its value against the dollar.

    The currency remains within the limits of a non-intervention trading band agreed with the International Monetary Fund (IMF) as part of a $56.3 billion deal last year. The upper limit of that band was 50.199 pesos per dollar on Thursday.

    The record low stands in marked contrast to January and February when the central bank spent just shy of a billion dollars trying to weaken the peso when it strengthened outside the limit of the band.

    Argentina’s inflation is out of control and a central bank poll of economists increased their 2019 inflation forecast to 31.9 percent.

    Goldman Sachs see 48 pesos per dollar by the end of the year thye said in a note on Wednesday

    Other Latin American currencies also fell on Thursday against a stronger dollar, which hit a near three-week peak against some currencies.

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