Post-PASO turbulence quickly hit the local exchange markets this morning, pushing the dollar above up to 65 pesos at some banks, soaring nearly 15 pesos from the 46.55 at which currency markets closed on Friday. This marks a collapse of around 30 percent. The peso had opened at 53 to the dollar, a drop of 14 percent, before plummeting further.
Banco Nación is currently selling dollars at 59 pesos.
An exchange-traded fund of Argentina stocks tumbled 24 percent in New York while the MERVAL, an index of the Buenos Aires stock exchange’s most important stocks, is down 37 percent. Some companies traded in New York tumbled over 60 percent with banks being hit especially hard and the S&P Merval Index plunged 48 percent in dollar terms.
This, as Bloomberg reported, was the second biggest one day drop anywhere in the world in the pat 70 years. The first was Sri Lanka in 1989 as it descended into civil war.
Meanwhile, the nation’s offshore notes collapsed, with the country’s 100-year bonds down almost 26 percent in New York to 55.15 cents on the dollar.
In response, the Central Bank of Argentina rose interest rates on the Leliq 10 points to 74.035 percent. Argentina had one of the highest interest rates in the world, even before this latest hike.
Opposition candidate Alberto Fernandez and his running mate, former President Cristina Fernandez de Kirchner, won by a much wider-than-expected margin over Macri, spooking investors who were already trimming exposure to Argentine assets as the October 27 presidential election nears.
"The president cannot have peace of mind. The markets are giving warning that the government has put itself in a position it cannot respond to," Fernández told Radio 10 on Monday.
Argentina’s country risk has risen 45 points to 904.