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After the vote on the Budget, the dollar goes down

October 10, 2018 - By Joseph Taylor

The market received the average sanction of the Budget approved this Thursday at dawn, a key step for the agreement with the Monetary Fund, with a dollar in decline. After two days of rise, the currency traded at $ 37.70 at Banco Nación (always the cheapest), 17 cents more than the previous day, when it had closed at $ 37.87.

In the wholesale market, which is where large companies and banks operate and which is then taken as a reference for the retailer, the currency falls 29 cents to $ 26.75. The same happens in Brazil, where the dollar falls 1% against the Brazilian real.

On Wednesday, the dollar, which had been trading calmly, gave a 45-cent jump on the end of the wheel and closed – on the wholesale market, at $ 37.04, equivalent to a 1.2% rise. In the retail market, it rose to $ 37.87 towards the close, when two hours earlier it was quoted, according to the Central Bank survey, at $ 37.55. It was an unexpected leap in which some saw an effect of the riots that occurred at that time outside the Congress that dealt with the Budget Law.

 The Central Bank is bidding daily Liquidity Letters to control that banks and investors go to the dollar. However, there is still greed for the currency, as demonstrated on Wednesday: although the Treasury reduced the rate of Letes in dollars to 5.5% per year, the interest in renewing maturities -roll over in the jargon- increased. those papers. In the auction of Letters to 182 days (with maturity on April 26, 2019) and papers were adjudged for US $ 815 million at a cut price of US $ 973.31 for each USD 1,000 VN, which represents a nominal rate annual rate of 5.5%.

According to official sources, it was possible to renew 85% of the expiration. The 2019 financial program is designed with a 60% renewal of maturities. If that number grows, expand the mattress.

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