Moody’s Risk Qualifier explained that the Success of CEPO Survey It depends on attracting long -term investments. This strategy seeks to stabilize Argentina’s finances after the fall in reserves.
Moody’s warned that the success of the departure of the stocks in Argentina will depend on the attraction of long -term capitals. This qualification occurs in the context of a partial survey of exchange restrictions to individuals, which seeks to balance external finances after the fall in international reserves.
The qualifier indicated that these measures suggest a Gradual process towards total elimination of stocksfirmly supported by the IMF. According to Moody’s, the level of international reserves will be a key indicator to evaluate the sustainability of this adjustment.
In addition, the firm stressed that the new system of mobile bands will be evaluated based on the demand for foreign exchange in the local market. The analysis of the progress in the elimination of capital controls will be essential to determine the trajectory of Argentina’s credit profile.
Moody’s stressed that the final success of the measures is conditioned to the country to attract sustainable investments, thus avoiding the dependence on short -term financial capitals.
Finally, the qualifier assured that it will continue to closely monitor the process of flexibility of the stocks and capital controls, to evaluate its impact on the path of Argentina’s credit profile.
CEPO output and agreement with the IMF: What do the most important investment banks think
He Exchange Standing And the agreement with the IMF were positively valued by three of the most influential financial institutions in the world: JP Morgan, Morgan Stanley and BNP Paribas.
The heart of the plan is the according to the IMF Approved last Friday, which includes an initial disbursement of US $ 12,000 million in 2025. To this are added another US $ 3,000 million subject to future reviews, more complementary funds from private banks and multilateral organizations. In total, the Central Bank (BCRA) would have about US $ 20,000 million to underpin a transition to a managed exchange flotation scheme.
Meanwhile, the new regime establishes a system of exchange bands between $ 1,000 and $ 1,400 per dollar, with 1%monthly adjustments. The objective: allow the market to gain predictability, attract foreign investment and avoid volatility peaks. The BCRA interventions They will not be sterilized, which implies that the accumulation of reserves will be prioritized even at the expense of higher interest rates.
The most recent report of Morgan Stanleytitled “Going All In”, highlights a renewed optimism towards the macroeconomic course of Argentinapromoted by a new agreement with the International Monetary Fund (IMF) and a financial package of US $ 20,000 million that promises to strengthen reserves and release the growth potential.
The report is signed by Fernando Sedano and says it clearly: “We have a positive vision of the announced frame, which should allow an accumulation of currency reserves and a more sustained growth.” The bad: “It is likely that there are short -term inflationary pressures.”
In the words of the report, “over time, the bands will lose relevance and the system will be freer.”
“The scheme is consistent, ambitious and pragmatic. Success will depend on its implementation“, summarizes the report.
“We suspect that agricultural producers will need to see a weaker exchange rate than approximately $ 1,150 they obtained last week. The closer the $ 1,400 ceiling, it is more likely that a greater amount of grains will be liquidated, which would eventually allow a subsequent appreciation of the weight and purchases by the BCRA,” says Sedano.
While the program points to stabilization, Morgan Stanley warns that there will be “temporary inflationary pressures” as a collateral effect of the reforms. The fiscal anchor and the goal of monetary targeting based on transactional M2 would help control the process, but greater volatility is expected until the new regime is consolidated.
Meanwhile, the report of JP Morgan He stressed that the announced measures “exceeded optimistic expectations” and were interpreted as a key step to “release the repressed potential of the Argentine economy.” As indicated by its analysts, the new macroeconomic scheme will increase investment, improve the accumulation of reserves and consolidate disinflation in the medium term.
However, they warned that transient inflationary pressures could be caused by liberalization. It was clarified that the PASS-THOUGH CANDIARY would be more moderate than in previous decades, since part of the devaluation was already absorbed by prices in March.
BNP Paribas agreed that the policy change was bolder than expected, and stressed that the Market received a clear fiscal discipline signaleven in an election year. It was valued that “the primary fiscal surplus and anti -inflationary commitment strengthen the credibility of the plan.”
In turn, it was anticipated that, with less uncertainty and consistent policy, the country risk could descend significantly. It was also pointed out that inflation could be moderated monthly towards the middle of the year, if the exchange convergence process is maintained.
