The liquid reserves of the Argentinian Central Bank are -$5.13 billion USD (NEGATIVE). This means part of consumers’ USD bank deposits have already been used and the only way to reverse it is to sell almost ALL of the BCRA's gold position.
Argentina raises rates 300bp and restricts access to dollars [Central Banking]
Argentina’s central bank raised its policy rate by 300 basis points to 81%, on April 20, amid a worsening monetary crisis. The Central Bank of Argentina (BCRA) also restricted access to dollars for certain business payments. The BCRA must now give permission if firms want to pay interest on intra-company debts with dollars. It said the measure will stay in place until the end of this year. Most service-sector businesses applying for dollars will now have to wait 60 calendar days to receive
Underpinning Argentina's financial woes is an artificially pegged exchange rate. This means it's set by the government, rather than market demand. It has given rise to a parallel currency market where pesos and US dollars can be exchanged illegally at cuevas ("caves") or via arbolitos (literally "little trees", which refers to the green bills or "leaves" traded by currency vendors for roughly twice the official rate).
Money exchanged at this rate is known as dolar blue or the blue dollar. And Argentines — bludgeoned by decades of double-digit inflation — can't get their hands on enough of it.
Some experts believe Argentines hold more US currency than anywhere outside the US.
World Inflation Rates [Trading Economics]
World Interest Rates [Trading Economics]
US banks on alert over falling commercial real estate value [AFR]
US regulators outline new rules to toughen financial oversight of non-banks [FT]
German public sector workers agree to wage deal with employers [investing.com]
Australian Government Review of Central Bank
This week's Government report into the running of the RBA was a public humiliation for Governor Phil Lowe and his academic mates.
Key points
"Groupthink is a phenomenon that occurs when the desire for group consensus overrides people's common sense desire to present alternatives, critique a position, or express an unpopular opinion. Here, the desire for group cohesion effectively drives out good decision-making and problem solving."
This point is clear guidance as to why a new RBA is needed.
This week's CPI report will decide the short-term direction of rates and the currency.
Australia to launch sovereign green bond next year [AFR]
The bond will allow big investors such as superannuation funds and banks to finance public projects aimed at getting Australia to net zero, Treasurer Jim Chalmers says.
Short 0.7000
Short 0.7100
Stop 0.6825
Positive carry
Pretty dull price action but having broken the uptrend channel we went up to check the scene of the crime and failed with an outside candle.
Below 0.6621 to 0.6600 and break below leads to 0.6200 or slightly below.
Stop down to 0.6825 as 2nd double top now in place at 0.6810.