Argentina 's economy on the brink of collapse ~ Manage Your Loan

Wednesday, September 25, 2013

Argentina 's economy on the brink of collapse

When the April 16 the Government of Cristina Fernandez de Kirchner expropriated the 51 % stake in YPF Repsol was controlled , Argentina CDS , which measure the risk of default of a country, rebounded to nearly 1000 points and played annual ceiling. The populist movement of the president of Argentina was totally counterproductive , and just as nationalization rumors CDS drove up almost 300 points, from 700 to 958 basis points.

Obviously , the nationalization of Argentina company dedicated to the exploration of oil fields in the country led to the establishment of a sense of legal uncertainty very harmful. In fact, the exploitation of the deposit of Vaca Muerta , which need substantial foreign investment so expensive extraction, could not yet start their activity by the lack of those investors.

But Argentina is not only legal uncertainty for companies , but also for its citizens. The public interventionism so wild that is making this country is taking them almost to ruin. The purpose of the call FX market was to establish greater control by the Treasury to contain capital flight . Result: prohibited the purchase of foreign currency by the Argentines used for savings and increased called black market where dollars were sold well above the official rate . In the end, the Argentines could not buy imported goods . Argentina President to the FX market does not exist, but the CDS are located and in 1489 points.

What's more , the New York Federal Court has ruled the obligation of Argentina to pay 1,330 million owed ​​to hedge funds that refused to restructure their portfolio Argentine bonds when the country went bankrupt in 2001 , further indicating that this payment must be made prior to payment of the bonds that did accept the restructuring , which could accelerate the default .

Meanwhile, Brufau , President of Repsol , is still waiting for compensation from the Argentine government ... Will there to collect it ?


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