After the electoral setback, Milei’s economic plan suffers a blow: the dollar shoots, the country rises and Argentine bonds lose support while Argentine actions collapse. Morgan Stanley withdrew his recommendation and the tension with banks grows on a key expiration. The frozen real economy aggravates the social crisis.
After the overwhelming electoral defeat, the markets sank. The dollar shot and operated at $ 10 pesos from the $ 1470 band, the country risk exceeded 1100 points and the Argentine shares sank up to 25% in Wall Street.
The influential American bank Morgan Stanley released a hard report on Monday where he withdrew his “favorable position” on Argentine assets. The recommendation had been announced just a week ago in a report entitled: “Betting up to Argentina towards the electoral season”, but after the result they changed the strategy.
“The results were against surveys and our expectations,” they said from New York, projecting a bond fall of about eight points and a “even stricter” monetary policy, to try to maintain exchange stability to the national elections of October. It is that they see “reasonable” that the Argentine weight weakens and “potentially approaches the limit of the exchange band despite the high rates.”
The government comes from a adjusted calendar of maturities product of Caputo’s financial engineering to maintain the “exchange peace”. To the tension climate, a dispute with the banks was added by the rise rise (to remove weights of circulation and prevent them from going to the dollar), while offering 70% rates to “kick” the debt satisfying the thirst for profits from the banks.
Within this framework, with rates for the sky and lace at historical levels (52%) the government faces a key expiration this Wednesday for 7.2 billion pesos. The Secretary of Finance, Pablo Quirno, reported the instruments that the Treasury will offer in the next tender on Wednesday, where the shortest letter will be 45 days, that is, with a subsequent expiration of the October elections. Which generates a great question if the banks will access to renew the bonds or not, adding a speculative potential to turn to the dollar and thus shoot the currency, or if in that case the government has to raise the rates again.
In the first case, the National Treasury Fire Power is very limited. According to estimates of private consultants (since there are no official data), government intervention selling dollars to contain the price generated wear in treasure reserves estimated at around US $ 1130 million. The official data indicate that until the October 26 elections, the treasure faces maturities with international organizations for very similar figures: US $ 1135 million. Therefore, unless you enter dollars for loans to the Ministry of Economy, the capacity for intervention is very limited. In this sense, you will have to appeal to the BCRA reserves, which by the agreement with the IMF, should be used in case of reaching the band’s ceiling, something that the government wishes to avoid at all costs.
In the second case, to raise the rates again, in addition to the large increase in snow snow with the financial bicycle, it generates a devastating effect for the real economy. Credit increasing the possibility of recovery. In that sense, this Monday, Indec spread the data on industry and construction with respect to Julio. As the specialist Luis Campos denounced, the data shows a fall in the industry of 2.3% monthly, locating 10% below 2023. Construction, for supplies, fell 1.8% and lost 24% in two years.
The industry fell 2.3% in July and is 10% below 2023 (INDEC).
The construction fell 1.8% and loses 24% in two years.
August has hardly been better and September … Anyway.
Does anyone want to think about the real economy?– Luis Campos (@luiscampos76) September 8, 2025
His only battle knight wobbles, having lowered inflation. For this, he appealed to the exchange anchor: he generated a financial bicycle with juicy profits for speculators to contain the price of the dollar, while going to a loan with the IMF, which was already spent more than 60% with the foreign currency bleeding. In the same sense, he appealed to the old austerity recipe, cooling the economy, collapsing consumption and production.
Kristalina Georgieva had asked to accompany the ruling party in the elections and her economic direction, however, the government suffered a hard slap. The old “new” recipes fail again, confirming that the IMF path only brings more misery and degradation. It is necessary to face it and defeat it.
National Economy / Economy / Dollar / Debt / Luis Caputo
Source: www.laizquierdadiario.com
