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Informe Mensual Económico Financiero N° 339 – Mayo de 2018

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At the end of April 2018 and in relation to December, Argentina devalued its

currency more against the dollar (10.2%) in nominal terms than the rest of the

large South American countries (Brazil 4.2%). The bilateral real exchange rate

of Argentina ars/dollar at the end of April 2018 versus that observed at the end

of 2017 was devalued 7% according the Central bank; it has devalued against

Chile (7%), Brazil (2%), China (10%) and the European Union (6%).

The tariff adjustment continues to feed inflation and at the same time causes a

very important change in the structure of household spending. As these are

essential services, families maintain consumption and sacrifice other goods and

services, whose demand is reduced. The counterpart is the reduction of

subsidies, indispensable to improve the fiscal equation.

In this sense, the Central Bank of Argentina sold in April 4.7 billion dollars in a

context of deterioration of expectations (inflation, tariffs, political tensions) to which

the change in the tax regime affecting the holders of Lebac (Central bank Notes)

non-residents, was added. The stock of Lebac in the hands of non-financial private

sector begin to decline at the end of April, also Leliq (liquidity Central bank Notes).

In any case, the stock of Lebac + Passes represents 120% of the Monetary Base

(60% two years ago). Lebac auction in May 15 will be crucial because the maturity

of the 50%.

Argentine exports of 2017 (58,428 million dollars) exhibit the following structure by

zones and countries. The Mercosur, European Union and NAFTA occupy the first

positions, reaching 27,127 million, with a concentration of 46.4% of the total. From

the point of view of the major items, manufactures of agricultural origin participated

with 38.5% of the total, which together with Primary Products completed 63.9%.

El IAEF agradece la colaboración de la Sra. Marta Álvarez – Executive English en la traducción de

esta Síntesis Ejecutiva.