To avoid further loss of reserves and calm dollar expectations in the midst of drought, government will defer payment to the IMF of US$ 2,680 million which expires this Monday and Tuesday. The idea is to specify this once the organization’s board of directors meets, what could happen next March 31st. The expectation is that the Fund will approve a disbursement of US$ 5.300 million and with these resources will pay the due dates.
The council was supposed to meet on March 10 to evaluate the fourth revision, but the negotiations that began in January got complicated and ended only last week. In that picture, The IMF has agreed to relax the goal of accumulating net reserves of at least 2,000 million US dollars and would have approved a late payment this week. “It has been agreed with the IMF to pay with the March 31 disbursement,” they told the economy ministry.
Massa’s team reached a technical agreement with the staff last Sunday. The relief from reserve requirements is the third change since the signing of the agreement in March last year and aims to give the government a break in an election year, which has seen it unable to achieve its initial goal due to drought. “Once there’s a staffing agreement, the staffing ratio goes, the directory date is finalized and it’s an operational matter,” they explained.
One of the obstacles that complicated the negotiations and forced new tax projections was the passage of the retirement moratorium more than a week ago in Congress. IMF staff believed the move was “unforeseen” and will require “early measures” to ensure the reduction of the primary deficit from 2.3% to 1.9% of GDP. Kirchnerism and some analysts, on the other hand, believe that there should be a new review and payments postponed to 2024.
In exchange for easing the target reserve, the Fund asked “stronger policies”, accelerate the reduction of energy subsidies and stop intervening financial dollars by buying dollar bonds. The Central Bank has been using this facility since mid-January, but cash with liquidity exceeded $400 last week.
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Source: Clarin
