THE OFFICIAL EXCHANGE RATE DECLINED AGAIN BY 0.7%, CLOSING AT ARS 1,394.15, remaining 13.6% below the upper bound of the band. Financial FX rates posted steeper declines, with the MEP falling 1.6% and the CCL down 1.1%, closing at ARS 1,408.5 and ARS 1,461.0, respectively, while the FX swap spread widened further to 3.7%. The pullback in exchange rates occurred despite the BCRA recording net purchases of USD 141 M in the official market, bringing total purchases to USD 890 M in February and USD 2,048 M year-to-date. Gross international reserves declined by USD 251 M, primarily reflecting the drop in gold prices.

ARS-DENOMINATED DEBT POSTED A POSITIVE SESSION IN THE TRADING DAY FOLLOWING THE AUCTION, in which the Treasury absorbed ARS 1.7 trillion in liquidity, although short-term rates moved higher: the overnight repo and one-day call rate traded around 27%–28% NAR, up from 22%–23% NAR in the previous session. In USD terms, CER-linked bonds rose approximately 1.4%, dual bonds and the fixed-rate curve advanced around 1.3%, while dollar-linked instruments posted a more moderate gain of roughly 0.6%.

SOVEREIGN BONDS DECLINED BY 0.2%, despite the Senate granting initial approval to the Labor Reform and amid a positive session for emerging market debt. Bonares led the losses with a 0.3% decline, while Global bonds fell 0.1%, and the legislative spread between GD30 and AL30 widened to 3.5%. In this context, country risk closed at 508 bps. Meanwhile, Bopreal bonds traded unchanged.

STOCKS WERE HIT HARD, WITH THE MERVAL PLUNGING 5.7% IN PESOS AND FALLING 4.6% IN DOLLAR TERMS, CLOSING AT USD 1,948. As a result, the Merval returned to negative territory for the year, posting a 2.7% decline in dollars. The banking sector was the most affected, with shares of Galicia, BBVA, and Supervielle dropping between 6.8% and 7.8%. Similarly, Argentine stocks listed on Wall Street fell an average of 4.3%, driven by declines in Globant (-11.2%), Galicia (-8.0%), and BBVA (-7.9%).