2023-07-20 16:09:29
The announcement of a new agreement with the IMF would be imminent. It was speculated that the announcement would become official tomorrow, Friday, and that Sergio Massa himself would make an express trip to Washington this Thursday to be part of the signing.
Times, however, seem to stretch. The deadline is drawn by the maturity of US$2.7 billion that Argentina had to pay at the end of June and decided to postpone until the end of July (this is allowed by the letter of the current agreement).
To face the payment, Argentina urgently needs the disbursement of US$4,000 million that the Fund was to make in Juneand that it was suspended due to the Argentine default, which used reserves to intervene in the exchange market during the April run, something that the agreement expressly prohibits.
Even though the current agreement is virtually “down”, Sergio Massa has been negotiating since May so that the body forward at once the rest of the disbursements scheduled for all of 2023, which is equivalent to regarding US$8.5 billion.
The IMF began to press in the last hours, to verify prior to the signing if the Argentine government is truly willing to advance in the structural measures. Among other things, the agency seeks a devaluation of the official exchange rate.
In turn, the agency understands that with the current agreement suspended, it is the opportunity to renegotiate all the guidelines and goals going forward. In this regard, the main difference this week was the fiscal deficit target at the end of 2023. Fund wanted to bring it to 1.5% of GDP, deepening the adjustment of public accounts in the middle of an election year. Massa, on the other hand, remains firm in the goal of 1.9% which was in force until April.
But when everything was anticipated to be on track, political pressure appeared and a very harsh report from the board, which warned of the need to “tighter monetary policy” and of “a unified exchange rate”. It is an eloquent hardening prior to the signature.
Sources close to the negotiation indicate that the IMF began to press in the last hoursto verify prior to signing if the Argentine government is truly willing to make progress on structural measures that they guide the economy, and if he dares to give signals in that sense even in the midst of the electoral scenario.
- u$s 8.500
- The millions that Massa expects as an advance disbursement from the IMF, within the framework of the agreement that would be signed this week.
The transcended ones realize that the agency expected a devaluation of 80% to be applied in the official exchange rate, which was flatly ruled out by the Argentine economic team, given the implications that a similar measure would have on the transfer to retail pricesjust when the first appreciable drop in inflation has just been registered so far in 2023.
It was within this framework that the economy minister Sergio Massa decided to delay his trip to Washingtonand instead met alone and and on ZOOM for an hour with the executive director of the IMF, Kristalina Georgieva. There they would have finished polishing the differences, and the signing of the agreement would be guaranteed.
On Thursday morning, the strongest rumor is that The Argentine government would have decided to advance in a series of measures that would be announced as a “package” tomorrow, Friday, in order to give the IMF a clear signal of intention prior to signing.
Possible announcements include the chance to carry out a 10%/15% devaluation in the official exchange ratethe implementation of “Soybean Dollar IV” to bring the export exchange rate to around $350and the extension of “Country Tax” on the bulk of imports (energy would be excepted). However, the fine print of each of the measures is unknown.
1689869769
#Zoom #Georgieva #exchange #measures #scenes #agreement
