Markets operate unevenly this Monday in Argentina after a resounding defeat suffered in the legislative elections by the center-left government, which was further weakened in the midst of a deep economic crisis.
After the triumph of the center-right coalition Together for Change by almost 10% at the national level, the beaten Peronism in power called for dialogue, but it is still not clear what direction the ruling party will take after the result.
The wholesale Argentine peso fell 0.08% to 100.31 per dollar, while in the marginal market it remained balanced at around 200 units, while the country risk fell sharply 38 units to the level of 1,697 basis points.
Bonds in the over-the-counter market improved 1.7% on average, as opposed to the stock market that fell almost 4% after a bullish start, in a technical adjustment of positions.
“The government must calm the markets, communicating a more orderly fiscal and monetary policy. A stabilization plan is needed,” said economist Rodrigo Álvarez.
While the opposition victory generates optimism in the markets, the defeat of the center-left ruling party raises doubts about the management capacity of President Alberto Fernández.
Experts consider, however, that the result of the elections had already been largely assimilated by the markets after the defeat suffered by the ruling party in September in the legislative primaries, which were a kind of advancement of the elections of the Sunday.
After losing control of the Senate, the ruling party needs Congress to soon discuss economic reforms and an eventual agreement to renegotiate a debt of 45,000 million dollars with the International Monetary Fund (IMF), procedures that could now be faced with difficulties.
“Today we took a huge step (…) We have a huge opportunity, let’s look ahead,” said the mayor of the city of Buenos Aires, Horacio Rodríguez Larreta, on Sunday night, considered by many experts as the main candidate of the opposition for the presidency in 2023.
Reference-www.eleconomista.com.mx