Economy

Primaries indicate Macri's exit in Argentina, plummeting Brazil's stock market

Since each party put forth only one candidate at this stage, the primary serves as an indicator of the first round of voting

Ler em português
  • The results of the primaries in this year’s elections in Argentina have shake up the financial market this Monday (August 12th);
  • The stage of the primaries ended up revealing that President Mauricio Macri has little chance of being re-elected;
  • Since this time each party selected only one candidate per option, the primaries ended up anticipating the results of the first round of voting, which will occur at the end of October.

The results of the primaries in this year’s elections in Argentina, which took place on Sunday (August 11th), have shake up the financial market this Monday (August 12th). And it is stoking the fire of an already hostile environment with the trade war morphed into a currency war between the United States and China – the Chinese currency continued to be valued above 7 yuan per dollar – and the first contraction of the UK’s economy in seven years, among other factors.

Established by the Ex-President Nestor Kirchner, the primaries are set up to help the Argentinian electorate select which candidates of each party should participate in the elections. Since this time each party selected only one candidate per option, the primaries ended up anticipating the results of the first round of voting, which will occur at the end of October.

Broader than any electoral survey – since it requires for all voters to partake – the stage of the primaries that occurred this Sunday (11th) ended up revealing that President Mauricio Macri has little chance of being re-elected. The vote also showed that Ex-President Cristina Kirchner may also be given the opportunity to return to politics in the Latin American country, as vice president of Alberto Fernández. The slate of Cristina received 47.65% of votes, while Macri obtained 32.08%.

This Monday (12th), to contain losses, the Central Bank of Argentina (BCRA) had to raise interest rates of Treasury bonds of seven days, known as Leliq and a reference in the financial market. The commercial dollar was valued above 50 pesos, having surpassed the 60 pesos in the morning.

In Brazil, the effects were also negative. The commercial dollar was valued at BRL 3.98 for sale, having reached the BRL 4 in the middle of the morning. The stock market in São Paulo had losses of 2%, and end up the day with 101.915 points.

Still, analysts believe that Brazil has a good capacity to absorb external shocks and that the effect of the Argentinian Presidential Election will not be so profound.