Stuart Culverhouse Head of Sovereign & Fixed Income Research
Hasnain Malik Strategy & Head of Equity Research
April 30 2019
Argentina: Credibility hit for policy (and the IMF)
Another day, another change to FX policy. Argentina’s central bank announced earlier this week further changes to its FX regime, the third set of changes to the currency regime since February on our count (and excluding other policy changes to the monetary base target and interest rates).
In short, the central bank has effectively abandoned its non-intervention zone (NIZ), the cornerpiece of its FX policy since October, and is pretty free to intervene as it likes to stabilise the peso (within reason), replacing what it had set out as a carefully constructed rules-based FX intervention policy with a largely discretionary one.
Here, we set out some thoughts on what this means for the macro situation and our views on top-down equity strategy...
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