Argentina Politics Updates - 26 April 2023
FdT and JxC coalition infighting, falling peso value
Sergio Massa to use ‘all tools of the state’ to counter exchange rate turmoil (Buenos Aires Times)
Argentina’s parallel exchange rate, known as the “dolar blue” neared 500 pesos to a dollar on Tuesday (as of this update, the rate is at 495)
The Central Bank intervened in the market, selling bonds to try and curb some of the unrest
Massa informed the IMF that the country “would need to renegotiate parts of its US$44.5-billion debt programme as part of a move to stabilise the economy.”
The gap between the unofficial and official rates closed at 123% on Tuesday
“Massa also announced that the Comisión Nacional de Valores (CNV) securities regulator and the Unidad de Información Financiera (UIF) money-laundering watchdog would be tasked with “investigating and clarifying” suspicious trading, alluding to unfair pressures on the exchange market”
President Fernández accuses opposition of fuelling peso fall (Buenos Aires Times)
The 10-day continuous drop in the peso’s value can be attributed to pre-election uncertainty, among other factors (current president Alberto Fernández dropped out of the race last week)
Fernández blamed the Argentine right for the peso’s drop, stating that “First, they set up rumours in the morning, they do [financial] transactions all day, and in the late afternoon withdraw their profit from the foreign exchange market, harming the savings of the majority of Argentines.”
Massa announced the government would use financial and stock market oversight bodies to investigate if any financial behaviors attributed to the slump
Inflation in March reached 7.7%
Argentina - State of the race six months out from the election (LARR)
A deep political divide, combined with extreme political infighting, has left Argentina’s major coalitions without clear candidates just six months ahead of the October 22 presidential elections
There is a strong anti-incumbent and non-traditionalist sentiment, favoring Javier Milei in the polls
Neither the FdT nor JxC coalitions have defined a single candidate
Slaps, internal discussions, and blame amidst a dollar that worsens the crisis and threatens the government (La Nación)
The Fernández administration is placing blame on various actors for the continuous drop of the peso over the past 10 days
The government intervened in the foreign exchange market, which it had agreed with the IMF it would not do, causing the country’s agreement with the Fund to fall through
The ever-worsening economic situation hurts the FdT electoral chances, just six months ahead of the election, and leads to increased support for libertarian Javier Milei
Cristina Kirchner evaluates publicly supporting Sergio Massa (Perfil)
Vice President Cristina Kirchner is scheduled to give a public address on Thursday
She is expected to show support to Sergio Massa, though it is unclear whether the support will go beyond his duties as Economy Minister and include a potential FdT backing as a coalition presidential candidate
To appease internally, JxC scheduled a meeting for its presidential candidates for next week (Infobae)
This will be the first meeting among those who have launched their presidential campaigns under the JxC coalition
Primary coalition party representatives will include:
PRO: Horacio Rodríguez Larreta, Patricia Bullrich and María Eugenia Vidal
Radicals: Gerardo Morales and Facundo Manes
Coalición Cívica: Elisa Carrió
Encuentro Republicano: Miguel Ángel Pichetto
The purpose of the meeting is to align campaign strategies and prevent Milei from benefiting from JxC political infighting; the photo op of the 7 pre-presidential candidates will demonstrate coalition unity
President's withdrawal does little to resolve internal tensions (Buenos Aires Times)
Tensions had been growing between Alberto Fernández and Sergio Massa, with Massa “alluding to ‘operations’ to deliberately precipitate his departure from the Cabinet.” (Massa still holds his ministerial position, as of this update)
“On the one hand, the subject of his candidacy – the cause of the conflict with Kirchnerism – is now resolved. But on the other hand, his strength and ability to govern has been weakened.”
Economic uncertainty in the months before an election has impacted the presidential race in Argentina many times before
Frente de Todos' PASO primaries: Alberto's favoured candidates and who’s in the race (Buenos Aires Times)
Fernández named Cabinet Chief Agustín Rossi, Social Development minister Victoria Tolosa Paz, and even kirchnerista Interior Minister Eduardo ‘Wado’ de Pedro as favorable alternatives for the Frente de Todos coalition, ahead of the country’s primary PASO elections
Economy Minister Sergio Massa, though often mentioned as a FdT candidate possibility, has not given any indication as to whether or not he would run for office
Daniel Scioli, Argentina’s ambassador to Brazil, has formally entered the presidential race, though he is not the preferred candidate of the FdT coalition
Milei’s policies – and poll numbers – spark concern in Argentina (Buenos Aires Times)
Libertarian Javier Milei’s “climb in voting intention surveys is prompting some individuals to withdraw their dollar deposits from banks”
Milei strongly supports laissez-faire economic policies
He also supports the dollarization of the economy, a plan which has many in the financial sector worried
“A report by the respected 1816 consulting firm concluded: ‘If the market perceives that Milei has any chance of governing, it is most likely that we will see a run against the peso. It could even generate a sort of self-fulfilling prophecy, with peso-holders fearing dollarisation and trying to get rid of their holdings, [thus] creating the conditions for this dollarisation.’”
Milei is unlikely to join the Juntos por el Cambio in their PASO list
Argentina’s IMF deal falls through: negotiations ongoing (Buenos Aires Herald)
The economy ministry believes that the country’s $44 billion agreement with the IMF has not fallen through, but rather “is being renegotiated from the ground up including disbursements and all targets such as international reserve accumulation”
The IMF had strict limits on the Central Bank intervening in the market by trading bonds to stabilize the peso, an action which the Bank implemented on Tuesday
The Central Bank on Tuesday bought US$41 million in the foreign exchange market, bringing April’s exchange balance to US$230 million positive
A taskforce from the Economy Ministry is set to travel to Washington, DC this week to meet with IMF representatives and further discuss the country’s lending agreement with the Fund
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