At the same time, the dollar fell by 8%, but country risk rose above 1500 points, and the stock market fell by 12%.

Market movement after the announcement Javier Miley And Louis Caputo They left the trend behind over the weekend Overall bearish for bonds and stocks their prices are in both pesos and dollars, everything is reduction of proportions in the range from 6% to 8% for alternative dollar quotes.

He The free dollar closed down 85 pesos, or 5.7%, to $1,415. The apartment has been on sale since July 4, following the government’s announcement of “zero emissions”. Also Stock market parities fell by 8%with an average cash-in-hand share of 1,319 pesos. At a wholesale dollar rate of 923 pesos, the currency gap narrowed to 53.3 percent.

On Saturday, the President and the Minister of Economy announced a change in the Central Bank’s foreign exchange market procedures to reduce the issuance of pesos for the purchase of foreign currency to zero, and accompanied this change with a decision to use the pesos received by the Treasury from the issuance of debt obligations to buy interest on debt securities worth more than US$1,500 million maturing in January 2025. Monday.

All Sovereign bonds governed by the laws of the State of New York fell by an average of 2%. The biggest drops occurred in the headlines with the longest duration. In this sense, the index country of risk The JP Morgan benchmark, which measures the difference in yields on U.S. Treasuries with emerging market peers, rose 48 basis points for Argentina in 1555 points Basics at 17:10.

“Although bonds have started to rise, the market is waiting for the results of the latest rules that are coming out, although they are good, we need to see how things go. It is more than clear that there will be no monetary problems,” he said. Leonardo Svirskyfixed income market operator.

In this case, the index S&P Merval Buenos Aires Stock Exchange fell by 12.3% to 1,504,984 pointsAlthough measured in dollars (based on the “cash with liquidity” price embedded in the ADRs), the losses were reduced to 4.1% precisely because of the collapse of the dollar stock market parity.

Meanwhile, American Depository Receipts (ADR) Argentine companies listed in dollars. the bank’s shares, which fell to 7 percent.

On the one hand, the “deepening” of zero emission that the government announced over the weekend is the Central Bank’s plan to intervene in the cash dollar market with settlements. In short, starting today, the monetary authorities are going to withdraw from the market the pesos that they issue every time they buy foreign currency to shore up their reserves. One of the money emission “faucets” that was still in operation.

The scheme is that every time the BCRA buys dollars on the official exchange market, it turns around and resells them on a parallel market known as cash and settlement. That is, you will buy dollars at around $900 per unit and then resell them in liquid cash at around $1,500. The selling will continue until the pesos issued for the initial purchase are withdrawn, and since the fiscal dollar is much more valuable than the official dollar, this will result in a net purchase of foreign currency (you will need to sell fewer dollars than you buy to withdraw the pesos issued, or in other words, assuming stable prices, it will keep 40 cents for every dollar purchased, while the issuance of pesos will be zero).

The goal is obviously to reduce the currency gap after free dollar closed last week at a record high of $1,500.

However, official intervention in the foreign exchange market does not usually have a positive effect on the prices of dollar-denominated sovereign bonds. It is these bonds that go bad every time the government wants to intervene at parallel exchange rates.

But the second announcement was intended to bring peace of mind to those who invest in these bonds not for the purpose of swapping but in search of a return on those assets. The finance minister, Pablo Quirnoannounced that the national treasury would use the pesos raised in periodic local-currency debt tenders to buy just over $1.5 billion that the treasury is due next January in interest payments on dollar-denominated sovereign securities. That is, it would hand over pesos to the BCRA in exchange for that portion of its reserves, reducing the money supply in the process, and would park those funds until maturity. A signal that will have no practical effect in the near term, but intended to signal to investors that, at least officially, the intention is to look after the health of dollar debt.