2024-01-11 15:58:23
The International Monetary Fund reached a new agreement with the Government of Javier Milei and the financial advisor of Bull Market Broker Gonzalo Tassano commented to this medium that, “The market is positive because it sees that there is an agreement with the Fund and it is beginning to look for stricter goals. which is what the IMF is asking for and this is very good, because within everything the economy is settling in.”
The objectives of the new agreement with the IMF
For the interviewee, the fiscal goals “They seek to accommodate everything that has been more permissive in recent years, because the Fund had many goals and all of them were not met.”
Among the IMF’s demands on the previous government, it was asked that the real interest rate be positive, something that is not required of the current administration. When questioned regarding this aspect, Tassano explained that, ““The Fund has a scheme of certain measures that must be adopted to improve an economy, within that there are several policy games and the country chooses what to do, whether fiscal or monetary adjustments.”
Regarding the objective of increasing the Central Bank’s reserves by 10 billion dollars by the end of 2024 and the problem with importers, the interviewee said that, “Surely the Government is looking to hold out until March or April and with everything that is the liquidation, then surely with reserves we will be able to pay everything and be comfortable.”
“As for the external debt payment scheme, we are well accommodated because the Fund is basically paying itself,” said the financial advisor. He then added: ““The objective is to make it sustainable and look for debt in the market and not ask the IMF for more money.”
How the agreement with the IMF impacted bonds
Regarding the impact of the agreement with the IMF on the bonds, Tassano commented that this “is closely related to what Minister Caputo said regarding looking for debt in the market and not depending all the time on the Fund.”
“The Government’s objective is to bring more money into the market,” stated the financial advisor of Bull Market Broker.
Along the same lines, the interviewee commented that the Government seeks to avoid carry trade, that is, investments that buy pesos only to put it at an interest rate. “The Fund is fighting for the carry trade, that is why the interest rate is lowering and it is being liquefied in pesos and little by little there are substantial increases in the dollar.”
1704989776
#Strong #market #response #agreement #IMF
