The start of phase two of the government’s economic plan was met with distrust by the market, leading to increases in alternative dollars, a rise in country risk, and falls in bonds and stocks. After a press conference held by Minister Luis Caputo and the president of the Central Bank Santiago Bausili, the parallel dollars surpassed 1,400 pesos and reached the highest nominal prices recorded so far.
On the first business day following the press conference, the blue parallel dollar climbed 40 pesos to end at $1,405. Financial dollars also saw an increase, with the cash with liquidity reaching $1,412.5 and the MEP at $1,413. Financial rates rose by 4.6% on the first day of the second semester, more than double the expected increase in the official rate for the month.
Despite the increases, the parallel dollars are still significantly lower compared to inflation rates. The exchange rate gap widened to over 50%, the highest point since January, with financial dollars reaching a 55% difference. The market is nervous about exchange rate stability as the gap widens above 40%.
The market’s uncertainty has been fueled by the Central Bank’s struggles to accumulate reserves, negative balances, and delays in lifting currency controls. The government’s economic plan announcement, including the crawling peg and dollar blend for exporters, did not satisfy market expectations, leading to drops in assets and stocks.
Investors are moving towards dollar-denominated investments due to growing uncertainty in the market, with a shift away from peso-denominated assets. The lack of a defined implementation period for the economic plan and the lingering doubts about exchange rate stability have kept the market on edge, resulting in fluctuations in financial markets.