2024-08-13 15:37:24
Executive Director, Equilibra Consulting, Martin Rapetti, It was explained that the deadline for the last agreement reached by former Minister Guzmán with the International Monetary Fund was the end of this year. Within this framework, the government must develop a new agreement. “It would be difficult for the IMF to intervene in the foreign exchange market by providing dollars at a price that the Fund itself considers overdue,” he said in the report. Mordo Fontevchiago through internet tv, Introduction to radio (1190 am) amadeus radio (FM 91.1).
Martín Rapetti is an economist, Executive Director of Equilibra Consulting, Conicet researcher, Adjunct Professor of Macroeconomics and Director of the Master of Economics at the School of Economic Sciences of the University of Buenos Aires.
The last time we interviewed you, you noted that you didn’t see an economic recovery. Before talking about a possible recovery, it seems to me that one issue that may cause noise is that, although the Mire government has excessively complied with some of the requirements of the agreement signed by Minister Guzmán with the International Monetary Fund, there is one thing that it has not done to this point. Does this create a situation where non-compliance with reserves ends up causing more tension between the IMF and this administration than it did with the previous administration, even if there is over-compliance in other areas? big?
Dictators don’t like this
The practice of professional and critical journalism is a fundamental pillar of democracy. That’s why it bothers those who think they have the truth.
I think you’re referring to the Achilles’ heel of the economic plan Caputobecause there is actually a conflict between the two goals. On the one hand, you target the needs of the Argentine economy Exchange market operations normalized and the prices they reflect. Everything suggests that the normalization of the foreign exchange market, after years of stockpiling, will lead to a rise in the exchange rate, because there are a lot of people who own pesos, because they are not only pesos issued by the central bank, but also pesos. Companies and individuals, without access to the foreign exchange market, own instruments in pesos that they can own in dollars.
If one imagines stock liberalization, imagine the exchange rate has to go up because someone wants to get rid of those pesos and convert them into dollars. The goal of normalizing the exchange rate regime conflicted with another goal of the Milley government when it came into office, namely lower inflation.
More dollars to pay for imports and headwinds from outside: Is the stock market exit delayed?
For this it always uses a fixed exchange rate and the government is doing that and when people use it as an anchor, the exchange rate is pushed back. So on the one hand you have the goal of normalizing the exchange rate regime, which requires a higher exchange rate, and on the other hand you have the goal of reducing inflation, which requires a more fixed exchange rate.
Therefore, for the first goal, the government gave the president great political support. We are curious to see that after 8 months in power and after making very strong adjustments to income, the government, especially the president, has Popular support is believed to be based on the economic goal of reducing inflation.
So there was tension, and the IMF felt it was necessary to first correct the problem and normalize the exchange rate regime. Maybe there will be alarm bells in the next review. There were already alarm bells in the last review, but the government had already reached its reserve target at that time. My impression is that the reserve target will not be met at the next review, and the IMF will certainly want to keep its sights on that target.
You know the push and pull of the IMF with the previous government, when they forced MASA to devalue after PASO, the IMF was said to be demanding 100%. Is it possible for the IMF to force governments to devalue the same way it forced Sergio Massa to devalue?
The plan we have now is the plan negotiated by Martín Guzman in 2020-2021, which will end at the end of this year. I don’t think for this program the negotiations will escalate to the point of ending the program with a devaluation.
But it is obvious to me that if the government wants to develop a new future plan with the IMF and wants to get new funding, It is difficult for the IMF to invest dollars to intervene in the foreign exchange market The price the fund itself considers past due.
Will a new agreement with the IMF have to be signed in December?
Not necessarily. At this point, the government cannot reach an agreement.
So should the government use funds to pay down debt?
This will start in September 2026.
That is, if there is no agreement, Argentina will have to repay its debt to the Fund in September 2026, which seems impossible…
I think over the next six months we should see a new series from this fund.
In other words, we can say that December is a turning point when Argentina will readjust its goals and economic plans.
Yeah, or season one next year.
Will that be the moment when we enter “Phase 2”?
This will be the third phase.
What is Phase 2? I’m having trouble finding it.
All the brutality of central bank balance sheets, the measures announced in recent months, are basically to eliminate all paid liabilities of central banks.
Inflation: Official data for July released on Wednesday
Elizabeth Pointer: How do we get to phase three? We face a difficult five months. How do central bank reserves increase? Yesterday’s LCG report projected negative reserves of $5.2 billion in the absence of a rebound in the economy.
I want to tell you that you have two conflicting goals. Economic recovery will put greater pressure on businesses Reserve lossbecause there will be more imports and more dollars will have to be sold.
I think the administration is very secretive and unclear on where it wants to go with this particular plan, remember Milley himself is an economist and he started talking about dollarization and then started mentioning currency competition. I think they’re looking for time to come to an agreement with the IMF that will give them an umbrella of greater credibility and for that Awaiting definition for US elections.
The administration understands that a better deal could be reached if Trump wins. At the same time, they continue with this plan of keeping things fairly stable, losing reserves, as they did with Massa in the past, and they have the space to do that.
Some people who are more politically experienced than me have suggested that even in Milley’s mind, there may be the idea of sustaining the stock through the 2025 election, which I think is very difficult to achieve, but obviously, from this point on. Looks like he’d be better off reaching Mire with inflation falling and keeping the dollar lagging behind. I think it’s going to be very difficult to achieve that given reserves and their decline.
Donald Trump praises Javier Milley in conversation with Elon Musk: ‘He’s really made a huge adjustment’
Claudio Mardones: We are on the eve of the publication of the July inflation index, which will be published by INDEC but, as usually happens, in the medium term the city’s inflation index stands at 5.1% compared to the same month. What do you see there? Do you think inflation is likely to rebound in terms of the Buenos Aires Index? What are your predictions for what to expect tomorrow?
Our price survey gave us a 3.5% in Julybased on the city’s data, using weights and making some corrections, it would be a little higher in our opinion, Probably around 4%. We believe that if we continue with our plan for monthly exchange rate inflation of 2% and economic activity in some sectors has stopped declining but remains weak, we may see inflation average 3% for the remainder of the year and we I believe it will continue to develop along these lines.
What are the factors that have the greatest impact on CABA inflation?
I think the key here is closely related to what we talked about at the beginning, which is how to get out of this equity tangle, and if the government faces this process irreducibly, in my view, there will be a correction in the exchange rate. in my opinion There will be an adjustment in the exchange rate between now and the 2025 election.
A lot will depend on the credibility generated by the government and the extent to which they release the stock, because if it’s done wrong or miscommunicated, it can cause more damage than if it were done with some people in an orderly and planned way. Big trauma.
Visual Fourier Transform
1723564559
#Martin #Rapetti #government #waiting #elections #reach #agreement #IMF
