As the week began, the blue dollar rose once again and financial markets showed a slight rebound. On the street, the exchange rate was at $1,295 compared to $1,245 on Friday. The MEP dollar advanced 0.5% to $1,250.93 and the CCL barely rose by 0.1% to exceed $1,268. The exchange market regained some stability after a string of positive news for the Government.
Investors are closely watching for political and economic signals that the Government may provide in the coming days to give more certainty about the direction of Javier Milei’s administration. While Argentine stocks listed on Wall Street are mostly operating positively, with YPF leading the way, the local market’s Merval index has fallen by 0.2%. Despite recent successes like Senate approval of Bases Law, structural reforms proposed by the Executive face challenges due to opposition projects with significant tax costs affecting fiscal balance goals.
The week ahead will focus on negotiations in Congress while economic indicators like commercial and fiscal results for May are expected to show positive outcomes. Monday’s IMF staff report approval was seen as good news but there are still no signs of “cool funds” arriving from the organization key to advancing government plans for stabilizing exchange rate and achieving fiscal balance goals.
Concerns remain over next steps to dismantle exchange rate trap and implement promised reduction of Country Tax by Caputo as central bank interventions in foreign currency market decrease possibly due to normalization payment schemes by importers; Government reaffirms commitment to exchange rate scheme emphasizing monthly devaluations and dollar blending ratio for exporters. The market remains cautiously optimistic about future economic and political developments in Argentina despite these challenges or uncertainties .
