Argentina Update –Uruguay & more –4th May 2023

th of May: 2023

Monday the 1st was Labor Day which means we’re coming out of a long weekend not only for Agentines but also for citizens of Uruguay. Which is why more than 10,000 Uruguayans took the opportunity to cross the border and spend the weekend in the Entre Rios province, where the convenient exchange rate makes everything incredibly cheap for them. From pharmacy products to gas and even food, more and more Uruguayans are traveling to Argentina as frequently as possible to stock on key products, leading to long lines at the border.

But the issue is larger than a weekend shopping trip. In Entre Ríos, residents denounced that some 2,000 Uruguayan families have rented permanent homes in cities like Gualeguaychú while keeping their jobs in Uruguay, thus affecting the real estate market, driving prices upwards and leaving people with no place to live. In addition to that, landlords prefer to rent their properties to weekend travelers at a higher price.

thousand tons of beef in: 2023

Brazil, on the other hand, will keep exporting beef to China at volumes similar to those of the previous year and is expecting an overall record of meat sales.

Speaking of Brazil, President Alberto Fernández traveled to Brasília on Tuesday the 2nd to meet with his Brazilian counterpart, Luiz Inácio Lula da Silva. The conversation focused on financing for imports and exports, particularly on finding an agreement over a credit line to boost Brazilian exports to Argentina.

Fernández’s team wants to find a solution that will allow exports to be made in a common currency instead of dollars, with the aim of protecting the Central Bank's reserves. Argentina’s Economy Minister Sergio Massa also traveled to Brazil to make sure fewer dollars are spent in bilateral trade. According to local media, Brazil will finance an export that will be paid directly in pesos to Brazilian companies, which will then convert those pesos into reais.

Also on that note about bilateral trade, Argentina will pay for Chinese imports in yuan instead of US dollars. The country will be able to program a volume of imports in yuan worth the equivalent of more than one billion dollars from next month. Plus, Argentina will finance about 1.8 billion dollars of Chinese imports between April and May by tapping the swap line that’s worth nearly twenty-four billion dollars.

This follows a global trend of de-dollarization talks, but it’s mainly aimed at protecting Argentina’s foreign reserves. Massa met with China’s ambassador to Argentina last week to roll out the announcement.

To protect foreign reserves, the Central Bank has dramatically raised the benchmark interest rate by 1,000 basis points, boosting the Leliq rate to 91% from 81%. The measure means that the yearly nominal rate for twenty-eight-day Liquidity Bills — the rate the Central Bank lends money to financial entities — is now 91%, whereas the effective interest rate is 141%.

This is the biggest rate hike in the last three years and a half and the highest monetary policy rate in twenty years. The Central Bank also raised the yearly effective interest rate for fixed-term deposits for individuals up to thirty million pesos (about 64 thousand dollars at the parallel exchange rate) to 140% in order to boost savings in pesos.

Last week, Massa also announced that he will be summoning all sectors to reach a ninety-day price-wage agreement. The announcement came at a meeting with trade union and social movement leaders but Massa said that the measures would also extend to businessmen. The minister said that the agreement was essential to head off inexplicable price increases due to the surge in the blue dollar when all imports were paid at the official exchange rate.

With everything that’s going on in the economic landscape, it’s surprising to hear that Argentina has the lowest unemployment rates in decades. President Fernández released a recorded Labor Day message on Monday the 1st in which he praised his administration for achieving such a low unemployment rate, with many provinces having full employment. Still, it’s important to look at the average salaries and whether they are enough to cover the minimum living essentials. Spoiler alert: many are not.

Minimum wage will surely be an important topic for the upcoming elections. Speaking of which, we have news. Cristina Fernández de Kirchner confirmed she will not run for presidency this year. She said so during a speech at a theater in La Plata, responding to Kirchernite activists outside who had started chanting “Cristina presidenta!” as she spoke. She told them not to have false hopes and went on to say she was condemned, banned and disqualified from running for political office after the sentence she faces from last year’s corruption conviction in the courts.

On the other hand, the Governor of the Córdoba province Juan Schiaretti announced on Tuesday the 2nd that he will run for President in the PASO primaries. While he didn’t specify what coalition he would run with, Schiaretti has said in the past that he is not interested in competing within ruling coalition Frente de Todos nor the opposition coalition Juntos por el Cambio, but rather in building a new space where other candidates can participate.

The other presidential candidate, Buenos Aires Mayor Horacio Rodríguez Larreta, said this week that he would overhaul social welfare plans if elected president. He was speaking at a community center in the neighborhood of Barracas, where he vowed to end the intermediation of social welfare plans and the organizations that profit from the needs of those who have the least. Programs such as the Potenciar Trabajo (Empowering Work) unemployment scheme, commonly called “plans”, are often administered by Argentina’s powerful social movements, rather than recipients being paid directly by the government. In other words, Rodríguez Larreta wants to cut the middleman.

In the city, Soledad Acuña, who is currently Education Minister in that district, has formally announced her withdrawal from the race to be the next mayor of Buenos Aires City. Among the candidates for the mayoral post are City government ministers Fernán Quirós and Jorge Macri, and UCR Senator Martín Lousteau.

If you want to know more about the early contenders in Argentina’s presidential race, there’s a short article over at Reuters that sums it up. Follow the link in the show notes to read it.

We can all bet on who will be the next president, but be careful, because real betting has become more common than ever. Sports betting at least. Since becoming legal four years ago, the sports betting business will not stop growing, and increasingly more people are betting not only on the results of football matches but the penalties, own goals and even the conceding of corner kicks to the opposing team. Companies like Codere, Boldt, Ivisa, Bet365 and BetWarrior are behind it, but every jurisdiction is profiting from it. The province of Buenos Aires collects around 400 million pesos per month (about 900,000 dollars at the parallel exchange rate), while the City Hall collects nearly 60 million (130,000 dollars).

Before we go, remember that the Buenos Aires Book Fair is now open and will run until the 15th of May. On Thursday the 27th, Writer Martín Kohan opened the 47th edition with a conceptual speech that offered listeners advice for their interactions in the coming days and underlined the importance of readers. Last year, the fair topped the one million visitors mark, and it’s very likely that numbers will be similar this time around.

Aaaand that's it for this week! Remember We have a Mastodon account! Check out our instance rorshok.social. If you don't know what Mastodon is or want to know more about it, check out the link in the show notes to our Substack

¡Nos vemos la próxima semana!