LatAm News Argentina

Bancoagrícola's Vice President of Finance, Alexander Pinilla, affirmed that the liquidity of the Salvadoran financial system remained positive in the first half of 2022. In this sense, Pinilla said that deposits in the Salvadoran financial system would continue to grow in the second half of 2022; however, he indicated that the growth rate of deposits would slow down. In this context, in the second quarter of 2022, Bancoagrícola's total deposits increased to USD 16.5 billion, while loans reached USD 15.5 billion.

Argentina's Minister of Economy, Sergio Massa, managed to close his first month in office with a debt placement of ARS 212,236 million. On Monday, in the second tender of August, the Secretary of Finance offered a bid for four securities maturing in 2022 and 2023. In this tender, the Treasury issued a Liquidity Bill (LELITE) maturing on September 30th, 2022; in addition, two discount bills (LEDE) maturing on December 16th, 2022, and January 31th, 2023, and an inflation-adjusted bill (CER) maturing on June 16th, 2023.

On Tuesday, Bolivia's President Luis Arce announced that he had approved the acquisition of USD 1,142 million in debt. According to studies, the country's external and internal indebtedness is currently at least 78.8% of the Gross Domestic Product (GDP). In detail, about 12 decrees were authorized by the Bolivian government to acquire debt contracts with the CAF, IDB, Fonplata, ICO, Eximba, KfW, and IFAD; to boost employment, health, water and sanitation, irrigation, climate change, roads, and energy projects, and to strengthen the State's statistical system and other public investment projects.

Costa Rica Report highlights

Although one of the "leitmotifs" of former President Alvarado Quesada was to leave the "house in order," this has been questioned by various political sectors, including the new President and economist, Rodrigo Chaves.

Administration of Rodrigo Chaves announced on June 22nd, 2022, the modification of the fiscal rule. This occurred after the National Child Welfare Agency (PANI) authorities raised alerts due to the restrictions to urgently allocate resources to private organizations that care for vulnerable minors since they denounced that they would run out of money to operate after June 30th.

On Monday, the Presidents of the nations that make up the Andean Community (CAN) - Colombia, Ecuador, Peru, and Bolivia - said they would like Venezuela, Chile, and Argentina to join the group. "If we manage to integrate Chile, Venezuela, and Argentina... I think this would change things significantly, and our voice would be heard more clearly on the world stage," said the Colombian President, Gustavo Petro. "I would like to express how important it would be for the Andean Community, and the benefits for its members, for Chile and Venezuela to rejoin," said the Peruvian President, Pedro Castillo.

The preparation of the General State Budget for 2023 will begin in September, and the Ministry of Finance already has a few starting points. One of them is the price of oil, one of the primary sources of income for the State's budget. According to the International Monetary Fund (IMF), the price of Ecuadorian oil will average USD 75.3 per barrel in 2023. With that price, the budget's oil revenues would fall by around USD 500 million compared to 2022, warned the former Minister of Finance, Fausto Ortiz.

President Javier Milei decided to eliminate "some trust funds that represent half a point of the GDP", announced this Friday the presidential spokesman Manuel Adorni. This removal represents some u$s2,000 million. "We appeal to politics to understand that transparency is above all else", he launched in his press conference at Casa Rosada.

According to the spokesman, these funds "lack transparency and represent half a point of the product, around u$s2,000 million". "We are going to put an end to these funds," Adorni said.

In televised statements made this week, the libertarian president revealed the strategy of legislating by decree after the failure of the omnibus law. Within this framework, trusts or trust funds would be one of the main objectives: "Have no doubt. I am going to put an end to all the black boxes in politics".

The Bases project, which did not pass the filter of the Chamber of Deputies and which resulted in the withdrawal and return to commissions of the regulation, granted Milei the possibility of "transforming, modifying, unifying or eliminating specific allocations, trusts or public trust funds created by norms with legal rank, including those destined to subsidies, reviewing their origin and destination to achieve greater rationality, efficiency, effectiveness, transparency and control of the use of public resources".

Source: Ámbito

Argentina Report highlights

Argentina's former Minister of Economy, Martín Guzmán, was in his post for 935 days. Since the return to democracy, the country's finance ministers have held office for an average of 518 days (less than two years). This short average duration and the high volatility of the Argentine economy in the last decades threaten the possibility of creating credibility and aligning market expectations.

The appointment of Silvina Batakis as Argentina's new Minister of Economy has not yet generated the expected "anchoring effect" of expectations regarding the new direction of the Argentine economy. The first impacts of Guzmán's departure and Batakis' entry on the scene resulted in the increase of the parallel exchange rate by approximately 20% and the sovereign debt reaching parities close to 20 cents.

"You will not see me setting any price". Under this premise, President Javier Milei rejected the possibility of defining by decree an increase in the Minimum, Vital and Mobile Wage, after the failure of the meeting between unions and employers, in which there was no agreement or mediation by the Government. He ratified that "the bargaining agreements are free".

The President expressed this in an extensive interview with Radio Rivadavia in which he also ruled out calling a national teachers' union meeting, in the midst of the conflict with the governors after the elimination of the incentive paid to teachers. "It is the responsibility of the provinces," he insisted.

Yesterday, the meeting between business and trade union representatives in which the increase in the minimum wage, which is $156,000, was to be defined, was frustrated. The unions were expecting an increase of 85% to bring it to $288,600. But they assured that the employers did not make any proposal and that the Government did not do anything to bring positions closer. On the contrary, they claim that it positioned itself on the side of the companies.

The purpose of the Wage Council meeting was to determine the new scheme as from March, in the first one-on-one meeting under the management of President Javier Milei.

The surprise was the way in which the conversation took place, since the Secretary of Labor, led by Omar Yasín, set up two different Zoom rooms, one to talk with the employers and the other with the trade unionists.

Source: Ámbito

On Friday, February 2nd, the S&P Merval is on track to record its third consecutive weekly gain, with the market's focus centered on the ongoing debate of the omnibus law in the Chamber of Deputies.

Within this context, leading stocks are experiencing mostly positive movements. The highest gains are seen in Sociedad Comercial del Plata (+6.5%), Bolsas y Mercados Argentinos -BYMA- (3.1%), and Banco de Valores (+2.7%). Meanwhile, the top losers include Pampa Energía (-1%), BBVA (-0.7%), and Transportadora de Gas del Sur (-0.7%).

In contrast, Argentine stocks listed on the New York Stock Exchange (NYSE) are having a negative session. Notable decliners include Bioceres (-3.6%), Despegar (-3.6%), and IRSA (-1.7%). The sole gainer in this scenario is Mercado Libre (+1.3%).

The S&P Merval's potential third consecutive weekly gain occurs as investors closely monitor developments in the Congress, where Javier Milei's government seeks approval for key laws to implement its economic plan.

Amid intense negotiations for the omnibus law, which includes privatizations, revenue-sharing with provinces, and delegated powers, the government resumed its consideration in Parliament after a recess last night.

Milei removed the fiscal chapter from the original project with the aim of securing political agreements and advancing his proposed changes.

Sources: Ámbito

On February 2, 2024, Presidential spokesperson Manuel Adorni commended the "titanic task of the Federal Police, National Gendarmerie, and Coast Guard" in response to the violence outside the National Congress the previous day. He emphasized that the government is not willing to let a group of violent individuals disrupt legislative debate.

During a press conference at the Casa Rosada, Adorni congratulated lawmakers from various political factions "for siding with the right side of history at a time of change chosen by the people at the polls." He affirmed that the government was elected to represent all Argentinians who seek a better country, constituting the majority.

Adorni also praised Minister Sandra Pettovello's "attitude in confronting poverty managers yesterday and making herself available to anyone who feels they have a need." He emphasized that the existence of a business with the poor was demonstrated, and the government would not allow it to continue.

Regarding the removal of the exchange controls ("cepo"), Adorni stated that it "will happen," although the exact timing is uncertain. He mentioned that the government's short-term goal is to resolve the exchange rate situation, irrespective of IMF recommendations.

Sources: El Economista

President Javier Milei seeks to modify the management of the trust funds which, according to the La Libertad Avanza (LLA) government, represents a "cash box" of $1.5 billion per year.

The Bases project, which did not pass the filter of the Chamber of Deputies and which resulted in the withdrawal and return to commissions of the regulation, granted Milei the possibility of "transforming, modifying, unifying or eliminating specific allocations, trusts or public trust funds created by rules with legal rank, including those destined to subsidies, reviewing their origin and destination in order to achieve greater rationality, efficiency, effectiveness, transparency and control of the use of public resources".

"Do you have any doubt that I am going to issue a decree to clean them (the trusts)? If I have them within reach of a decree, annul them! There are more curros than I imagined", confirmed the President in his statements.

On Wednesday, Argentina's "Super Minister" of Economy, Production, and Agriculture, Sergio Massa, announced the first economic measures to be implemented by his new economic cabinet. In this regard, Massa highlighted the main guidelines under which he will base his administration as Minister of Economy. These will focus on fiscal order, trade surplus, strengthening of reserves, and development with inclusion, by promoting investment, production, exports, and defending the domestic market. According to Massa, Argentina can become internationally competitive since he assured that "our objective is to grow with inclusion, and we came to work for that." After the announcement of the measures, Massa said that the cabinet agreed to establish "a scheme to advance foreign currency for exports with the fishing, agricultural, mining, and other sectors" to promote the entry of foreign currency into the country. Meanwhile, the Secretary of Production, José Ignacio de Mendiguren, assured that the short-term objective of the new economic cabinet led by Massa was to stabilize the country's macroeconomic variables and "recover the purchasing power of wages." In this regard, Mendiguren highlighted that "the most important thing today is to reassure the economy so that it can return to a cost structure. Today nobody knows how much to buy and how much to sell. People do not want to sell because they do not know if there will be a devaluation or not."

Source: Telam, Telam

Argentina Report highlights

The financial advisory portal, Bloomberg, warned about the level of international reserves in the Central Bank of the Republic of Argentina (BCRA) and pointed out the possibility that the bank will run out "of cash to avoid devaluating its currency." In this sense, Bloomberg's reporter, Scott Squires, argued, "with inflation approaching triple digits and, according to economists, only one or two policy errors away from setting the stage for hyperinflation, the Central Bank is desperately trying to avoid a devaluation of the peso that would only trigger another wave of price increases." In this regard, the portal described the country's finances as "terrible," where the BCRA "dispatches its operators to sell dollars and buy pesos that nobody wants." They added, "on average, they spend USD 60 million daily." For now, that has kept the peso mostly stable in the primary foreign exchange market." In this context, the portal warned about the "zero possibilities" that the country has to access external financing; in this regard, they added, "there are few possibilities of obtaining financial aid from abroad. Past defaults also spook foreign bond investors to lend money to the country now. The International Monetary Fund is also unlikely to step in at this point." On the other hand, the portal was optimistic about the appointment of Sergio Massa as the "Super Minister" of Argentina's Economy, Production, and Agriculture. However, they noted, "the central problem remains that there is no easy solution to the crisis."

Source: Cronista

Argentina's new "Super Minister" of the Economy, Production, and Agriculture, Sergio Massa, made his appointment as Minister official after resigning from the presidency of the Chamber of Deputies on Tuesday. Thus, the presidency of the Chamber will be assumed by Congresswoman Cecilia Moreau. After leaving the Chamber of Deputies, Massa announced the appointment of José Ignacio de Mendiguren as the head of the Secretariat of Productive Development and Matías Tombolini as the head of the Secretariat of Domestic Trade.

Source: Cronista, Cronista

According to private firms consulted by Bloomberg Línea, Argentina's inflation rate in July could reach around 8%, driven by the increase in the prices of essential food basket items in the country. In this sense, studies indicated that the Consumer Price Index (CPI) increase in July was mainly attributed to education, food, and non-alcoholic beverages. Estimates showed that the accumulated inflation rate for the year would reach 47%, while the inter-annual inflation rate would reach 72%.

Source: Bloomberg en Linea

El Salvador

El Salvador's banking sector assures that the country's financial liquidity remained positive in June

Argentina

Argentina's Ministry of Economy raises ARS 286,000 million in the local debt market

Bolivia

Arce authorizes USD 1,142 million in new foreign debt

Venezuela

Countries of the Andean Community press for Venezuela, Chile, and Argentina to join the bloc

Ecuador

The IMF suggests a price of USD 75 per barrel of oil for Ecuador's 2023 proforma budget

Weekly Review

Newsletters

Javier Milei will eliminate by decree trust funds for USD 2 billion

Javier Milei assured that the Government will not define the minimum wage by decree.

S&P Merval heads for third straight weekly gain; but ADRs fall on Wall Street

Adorni: "We are not willing to allow a group of violent people to stop the legislative debate".

Argentina

What are trust funds and which ones does Javier Milei want to eliminate?

Newsletters

Massa defines measures with his economic team

Bloomberg: Argentina is running out of reserves to avoid devaluating its currency

Sergio Massa adds José Ignacio De Mendiguren and Matías Tombolini to his team

Argentina's inflation rate in July could reach 8%

Argentina

Raúl Rigo, an expert in public accounts, returns

Argentina

Massa prepares trip to the United States, France, and Qatar

Newsletters