“We closed last night at 11pm.” The sentence released by an official of the Ministry of Economy reflects the vicissitudes that the government has had to face to make the agreement with the IMF more flexible. Bulked up by lack of reserves and heading into an election year, the government had to accept more restrictions to intervene on parallel dollarsthe repurchase of debt and the implementation of the moratorium on pensions, a measure that went badly in Washington.
The Fund has been focusing on purchases since January $520 million bond. Now without the help of the soybean dollar, the central bank then contained the financial dollars, but last week they woke up again. Now, according to sources in the Ministry of Economy, “the commitment is that the reserves are not used to intervene in the parallel market” and the repurchase of debt with reserves is “suspended”, which effectively stopped in February.
The fine print of the agreement also includes the commitment of “do not issue short-term external debt instruments“intervening on parallel markets. For some analysts it is a handbrake on credit with foreign banks with collateral bonds, but from Economy they believe there is still room to negotiate a “repo”, one of the measures that Sergio Massa announced when he established to strengthen reserves and which could not yet materialize.
Within the chapter on exchange, the Fund also reportedly greenlighted a new edition of the soy dollar or Malbec dollar which allows you to compensate for the loss of reserves.
During the year, the BCRA sold Reserves of 1,400 million US dollars in the foreign exchange market, as part of its strategy of moderate increases in the official dollar to avoid a sudden devaluation. “If it’s to strengthen reserves, they authorize us to do so.”they pointed out in Economics.
The Fund did not specify figures on the new reserve target, but overnight from Economy they suggested that there will be a “very significant adjustment in the first quarter” and a smaller cut (approximately $2,000 million) in 2023. From the portfolio, they released a similar calculation this morning, which predicts a stock of $4,700 million in March and $10,100 million at the end of December. Decidedly, it will be a breather
After two months of negotiations and “fights” after the G20 summit in India, the staffing agreement must still pass the filter of the organization’s board of directors, on which the approval of the disbursement of US$ 5.300 million depends. The problem is that the meeting will be held in April and $2.6 billion is due next week. With reservations at the limit, from Economy They bet there will be a postponement of paymentsas happened in December.
One of the hurdles that complicated the negotiations and forced new fiscal projections was the approval of the pension moratorium last week in Congress. that decision “sudden”according to the IMF staff, promoted by Kirchnerism, will require “first steps” ensure the reduction of the primary deficit from 2.3% to 1.9% of GDP. Therefore, the idea that is being considered a sort of segmentation by level of card consumption.
With a drought-stricken collection, The elimination of energy subsidies was also in the sights. Amid power outages, the government confirmed it would keep the register open until mid-April to keep aid to low-income sectors, while the Fund confirmed it expects progress in removing subsidies for higher-income residential users. elevated in May and publicity at the end of 2023.
The relief with the IMF was little known two days after Cristina Kirchner’s new claim to “review” the agreement and after a week of heavy clashes with the opposition over the debt swap agreed with the banks to cancel the $4.3 trillion payment in 2023. The agency asked “political consensus” to support the program, but in the Economy they ensure that “Cristina is not a problem” which worries Washington.
AQ
Source: Clarin
