The board of directors of the International Monetary Fund is preparing to approve today the second revision of Argentina’s program with the agency, which will allow the release of approximately 3.9 billion dollars for our country in the coming days and will strengthen reserves.
Although the official calendar of the council foresees that the directors will address the issues related to Ukraine this Friday, it will also include the analysis of the Argentine case, as minister Sergio Massa had anticipated when he was in Washington and later confirmed by Clarín.
The board will analyze in detail the staffing agreement on which the Fund’s technicians, led by Luis Cubeddu, and the Economics team have been working for several weeks, with the advisor Leonardo Madcur as the main reference. They did it first in zoom and then face to face for a week, during Minister Massa’s visit to this capital.
The agreement was then signed and Massa celebrated the announcement at the embassy. However, there was a whole bureaucratic process of drafting documents that had to be refined to now be presented to the executive directors, who are the representatives of all member countries.
The revision is estimated to be approved by the council as the minister toured the corridors of the White House and the Treasury ratifying the commitment to the program and the government Joe Biden does not want the Argentine economy to go off the rails. The United States is the country with the most weight on the board and nothing is approved without their endorsement.
As is customary in these cases, Cubeddu and his team will present the report to the board and, as anticipated, will say that Argentina has achieved most of the objectives set by the program, except for the reserves which should be a minimum of 3 , 45 dollars. billion of June.
When it was announced weeks ago that the review had been technically approved and would go to the board of directors for the final go-ahead, the Fund said in a statement that “most of the quantitative program targets until the end of June. 2022 were met, with the exception of the minimum threshold for net international reserves, mainly due to higher than expected growth in the volume of imports and delays in official external support. Subsequently, a period of volatility in the currency and bond markets was interrupted after decisive interventions that corrected the previous setbacks and rebuilt credibility ”.
Although the reserves have not closed (it is estimated that around 300 million dollars are missing), the technicians believed that the measures that Massa had taken to encourage the liquidation of the soybean plus the fresh funds of international organizations that he had managed to unlock would be used to respect the goal.
But the $ 1.2 billion loans that the Inter-American Development Bank had promised to release have not yet materialized (although it was technically approved, the scandalous departure of the organization’s president, Mauricio Claver Carone, may have delayed. the process) and this complicates the cash register process. Furthermore, without the liquidation of the soybean dollar, the coffers weaken.
That’s why the agency’s authorities could authorize a waiver, a pardon in the event of a minor deviation or being corrected, to stay within the agreed schedule. In the Fund they consider it a technical or routine procedure, only a matter of dates and when the “cut” of the analysis is made.
On the fiscal front, the IMF says that the primary deficit target of 2.5% of GDP in 2022 and 1.9% of GDP in 2023 has been ratified. (he calls it “better targeting”) of energy, water and transport subsidies, among other measures. Although this revision is expected to be approved, concern over subsequent ones increases. Without the soybean dollar, with lagging energy rates hikes and foreign currency outflows from tourism, everything could get complicated.
Source: Clarin
