Letter Ii From Argentina
Senin, 05 Agustus 2019
Commentary,
Economists,
Inflation,
Monetary Policy,
Politics and economics
Edit
Alejandro Rodrigues writes 1 time to a greater extent than from Argentine Republic (previous post)
"This graph shows the development of peso denominated fixed income usual funds. On Mon (after the elections) this funds suffered withdrawals of 6% of the full shares. Net assets cruel yesteryear to a greater extent than every bit prices plummeted (-5%). On Tuesday, shares cruel yesteryear 6% 1 time to a greater extent than exactly prices remained constant. On Monday, Money Market funds suffered withdrawals (drop inwards shares) of 16% although they didn't interruption the buck (on average). "
I get together from other discussions that Argentinians are trying to deed assets fast to dollars. That is consistent alongside this driblet inwards Peso denominated fund assets. (Though of course of education for every seller in that place is a buyer -- I wonder who the someone parties (non funds) are that are buying Peso fixed income assets!)
There is an interesting dynamic here. The gamble of a novel regime alongside terrible economical policies rises. It causes a rush to dollars. People suspect that the novel regime volition impose uppercase controls. The government has problem rolling over its own currency debt, every bit involvement rates rise. That makes the financial province of affairs worse.
In short, the gamble of a bad regime taking over tin dismiss provoke a crisis that makes the gamble of a bad regime taking over larger. Or perchance Argentines volition interruption the usual electoral patterns.
"This graph shows the development of peso denominated fixed income usual funds. On Mon (after the elections) this funds suffered withdrawals of 6% of the full shares. Net assets cruel yesteryear to a greater extent than every bit prices plummeted (-5%). On Tuesday, shares cruel yesteryear 6% 1 time to a greater extent than exactly prices remained constant. On Monday, Money Market funds suffered withdrawals (drop inwards shares) of 16% although they didn't interruption the buck (on average). "
I get together from other discussions that Argentinians are trying to deed assets fast to dollars. That is consistent alongside this driblet inwards Peso denominated fund assets. (Though of course of education for every seller in that place is a buyer -- I wonder who the someone parties (non funds) are that are buying Peso fixed income assets!)
There is an interesting dynamic here. The gamble of a novel regime alongside terrible economical policies rises. It causes a rush to dollars. People suspect that the novel regime volition impose uppercase controls. The government has problem rolling over its own currency debt, every bit involvement rates rise. That makes the financial province of affairs worse.
In short, the gamble of a bad regime taking over tin dismiss provoke a crisis that makes the gamble of a bad regime taking over larger. Or perchance Argentines volition interruption the usual electoral patterns.
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