MNI China Daily Summary: Thursday, April 11

MNI BRIEF: EU Risks Damaging Trust With China - MOFCOM

MNI BRIEF: China Small Lenders To Cut Deposit Rates Further

MNI BRIEF: China’s Hainan To Launch “Tourist Wallet”

MNI BRIEF: China March CPI Lower Than Market Expectation

MNI: PBOC Injects Net CNY2 Bln Via OMO Thurs; Rates Unchanged

March CPI Preview – Key To Unlocking A May Riksbank Cut

EZ/UK Bond Supply Calendar: Slovakia Auction, BoE APF on Monday

Indeed.com Tracker Shows Broad-Based Moderation in March / Q1

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

MNI BRIEF: Lawmakers Signal Tough Hearing For BOC's Macklem

© 1982-2023 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

Goldman Sachs Revise Their Official USD/ARS Forecasts

ARGENTINA
  • The country continues to face a difficult political crisis and a dire economic outlook. As the new leadership (including the appointment of Sergio Massa to Economy Minister) committed to stop relying on advances from the BCRA for financing the budget deficit, the central bank has been raising interest rates sharply and has steepened the path of the official USD/ARS exchange rate (around 80% annualised over the past month, from ~60% in April-May and just around 20% at the end of 2021).
  • These policy actions and announcements have been associated with a marginal tightening in parallel market spreads, from the wides of late July. While the steps taken on the monetary policy front go in the right direction, Argentina’s macroeconomic fundamentals remain in a distressed state, and the package of measures recently announced by Minister Massa to address the economic and financial emergency appears both underwhelming and insufficient at this stage.
  • As long as policy makers keep preventing the official exchange rate from being a market-clearing price, the slope of the crawling peg remains difficult to predict (as does the timing of any potential sharp devaluation).
  • But given the faster pace of Peso depreciation set in recent weeks, and the meaningfully-worsening domestic inflation trajectory, Goldman Sachs revise their official USD/ARS forecast to 160, 185 and 240 in 3, 6 and 12 months (from 130, 145 and 180 previously), with risks remaining skewed to the upside. GS also revise their longer-term forecasts, to account for the higher expected cumulated inflation differential vs the US in coming years.
BulletEM BulletEmerging Market NewsHomepage
BulletEM BulletEmerging Market NewsHomepage

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.