Previously there was the expectation that the Government was about to close a deal with one or two international banks with a repo operation to obtain $1 billion this would relieve the central bank’s depressed foreign exchange reserves.
Previously, the Minister Sergio Massa had announced the repurchase of global bonds for 1,000 million dollars to encourage a recovery of those securities and therefore lower the amount of bonds to be pledged to close the loan. But the operation went cold.
The decline in Argentine bonds has opened a waiting period and the repurchase of bonds has been suspended until a new opportunity. The $1,000 million seems a long way off.
Also, it was revealed by the government that closing an amendment to the IMF’s target on the accumulation of dollars in Central reserves was imminent.
by the hand of hit by droughtMassa argued that the climate issue is too important and that exporters’ foreign exchange settlements will be US$4,000 million lower in the first part of the year than estimates set out in the accord.
The head of the IMF, Kristalina Georgievahe would have given his assent for the easing, even if the technicians would be observing two “buts”: one is the latent need for a dollar of soy 3 favor the liquidation of agricultural export dollars and the other is the new pension moratorium approved by the ruling party and which would lead to an increase in spending of about 600,000 million dollars.
Even if for the technicians the credibility of Alberto Fernández is close to zero, let’s say one of your goals is the tax balance and simultaneously approve the approval of another pension moratoriumwhich implies the expansion of public spending by 600,000 million dollars, makes it clear that the electoral needs of the government are superior to presidential announcements.
Neither the moratorium nor another version of the soy dollar are welcomed by the IMF, even if the disbursement of another 5,400 million dollars will arrive in March, which will allow Argentina to pay the 2,716 million dollars which expire this month.
The Fund disburses, but demands that the Central accelerate the pace of the dollar’s rise wholesaler who was well below inflation in February: it grew by 5% compared to forecasts of increases between 6% and almost 7% of private consultants.
An important figure on inflation contained in the report by the consultancy firm Marina Dal Poggetto is the doubling from 40% to 80% of diffusion rate, which indicates how many prices of a food basket increase per week.
Practically, almost all prices were moved before entering the fair price regime that the Government intends in a month in which meat, which has a considerable weight in the food basket, has been the driving force behind the increase in the cost of living.
Among many others, Massa has to navigate the pressures of the Fund accelerate the devaluation (it should also do so to facilitate the liquidation of exports and the collection of withholding taxes) and the demand of the same Government to return the dollar to avoid another jump in inflation.
In reality, Argentina is already going through another regrettable inflationary regime, this time higher and with more marked limitations, both due to the drought and the persistent impossibility of accessing credit on acceptable terms.
So far, the Treasury has obtained loans beyond the deadlines in tenders for bills and bonds which it carries out by paying two costs: a higher interest rate and shorter terms of maturity.
A reportage by Ecolatina dwells precisely on that point: the place of the Treasury debt with an average duration of 3.3 months, when between November and January it did so in a 4-month window. The electoral deadlines and the exchange rate hedging process begin to play a decisive role until the end of the year.
Meanwhile, and this is the fourth announcement that would materialize in the short term, the Government is negotiating with the banks a bond exchange go to the 2024/2025 maturities of the treasury bills in pesos they have in their portfolio to try to decompress the complicated financial panorama of the year a little.
Source: Clarin
