Buenos Aires (AFP)
Peso down, country risk rising sharply: markets showed Tuesday signs of nervousness in the political situation in Argentina, where the specter of default, as in 2001, resurfaced.
Two days after the outgoing president's rout, Liberal Mauricio Macri, in Sunday's primaries, considered a dress rehearsal before the October poll, the peso fell again, losing 3.01% against the dollar.
The local currency, marked by volatility, traded on Tuesday at mid-day at 59.08 pesos to the dollar, against 57.30 at the close Monday night. Sign of distrust of investors, the peso had collapsed 18.76% Monday.
For its part, the Latin America's third-largest economy appeared to be in better shape, recovering 7.21% at mid-day, after collapsing close to 38% (37.93%) on Monday at the close. .
The crisis of confidence was also reflected in the sharp rise in country risk in Argentina measured by JP Morgan. This index assesses the possibility that Argentina is a bad payer, based on different economic indicators.
After jumping 1,467 points (+ 68.23% over Friday), the index climbed to 1,607 points on Tuesday, its highest level in the last decade.
It "is similar to that of Mozambique in 2016 and that of Argentina for the period 2001-2002, when it declared itself in default" of payment, wrote Tuesday the financial firm Capital Economics.
In 2001, the South American country, unable to meet the repayment deadlines of its debt, had experienced the largest defaults in history and a serious economic and social crisis that had traumatized Argentineans and financial markets.
According to Capital Economics, "the fall of the Argentinian markets and the increasing possibility of a turn to the left during the presidential election in October have revived fears of a cessation of payment" in Argentina.
"I will not declare the cessation of payments, I do not want to fail, in any way, it is very expensive to get out of default," sought to reassure Alberto Fernandez, the winner of the primaries, in an interview at Net TV.
- "Foretaste" -
"It was Macri who left us in default If the International Monetary Fund had not come to our aid, Argentina would be in default and Macri's use of the funds is pathetic. feeling of instability is Macri, "he added.
The moderate Peronist Alberto Fernandez and his running mate Cristina Kirchner, the former center-left president indicted in several corruption cases, won Sunday 47% of the vote, compared to 32% for the tandem composed of Mauricio Macri and Peronist leader Miguel Angel Pichetto.
If such a result is confirmed in the presidential election of October 27, Mr. Fernandez, 60, would be proclaimed winner in the first round: according to the electoral law, to be elected, it must obtain at least 45% of the votes, or 40% and an advance of 10 points on the second.
"It's just a taste of what's going to happen (...) a lot of people are not going to leave their money in this country, and they're going to leave, it's terrible what can happen" warned Monday evening the head of state at a press conference, calling not to "return to the past".
For now, the head of state has announced no action, limiting himself to indicate that his team was at work.
Overwhelmed by two currency crises in 2018 causing Argentina's currency to lose 50% of its value, Argentina called on the IMF to rescue a loan of more than $ 57 billion in exchange for a budget austerity package . The first repayments are expected in 2021.
The recourse to the IMF in 2018 was 12 years after the early repayment of $ 10 billion in 2006, when former President Nestor Kirchner decided to break with the Fund. At that time, the price of soybeans and agricultural raw materials exported by Argentina were blazing on the international markets.
© 2019 AFP