The Argentine currency market is preparing for Monday's opening after a week marked by a significant reshuffle in the National Cabinet, with the departure of Guillermo Francos from the leadership and the rise of Manuel Adorni. While markets typically react to uncertainty, Adorni's appointment is interpreted as a ratification of the economic course and a stronger alignment of the Cabinet with the inner circle of President Javier Milei and his sister, Karina Milei.
Recent Dollar Dynamics
At the week's close (Friday), the different exchange rates showed the following trend:
Blue Dollar: It had been showing declines, closing the week with a cumulative decrease. Financial Dollars (CCL and MEP): Also showed stability and even declines in the days leading up to the announcements, maintaining a relatively contained exchange rate gap. Official Dollar: Continues its crawling peg (controlled micro-devaluations) within the current scheme.
Overall, the last few weeks were a period of relative monetary easing, with the Central Bank (BCRA) achieving a positive reserve balance and the exchange rate gap not spiking.
Key Factors for Monday's Opening
The dollar's reaction, across all its quotations (official, blue, MEP, CCL), will depend on how operators and investors interpret the political changes:
The Political Signal (Course Confirmed):
The Message: The appointment of Manuel Adorni, a man who has been the public face of defending the economic program and "monetary restraint," is seen as a reinforcement of the hard line and a commitment to "fiscal balance". A greater emphasis on deep-rooted changes could boost confidence in the long-term sustainability of the economic program.
Technical Management (Demand Control):
BCRA Intervention: It is expected that the Central Bank will maintain its caution and intervention to manage the supply and demand of foreign exchange in the Unified and Free Foreign Exchange Market (MULC) for the official dollar. Financial Dollars: The government has shown the ability to operate in the financial dollars (MEP and CCL) with bonds, which helps keep these quotations in a narrow range, limiting the contagion effect.
International Context and Liquidity:
Attention will also be focused on the flow of foreign exchange from the agricultural sector and on debt maturities. Adorni's appointment and the message of "deepening the course" could initially generate a signal of continuity rather than a break, which would tend to mitigate sharp jumps in the exchange rate.
For example, an imminent maturity with the IMF always adds a layer of alert regarding reserves. The market had already discounted rumors of Cabinet changes. This tends to be well-received by the market, which values predictability in the plan.
Priority: Structural Reforms:
Adorni himself indicated that his priority will be to "deepen structural reforms".
