Sergio Massa met the number two of the IMF in the midst of the crisis: they discussed the impact of drought and the lack of reserves

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A few hours before the summit between Presidents Alberto Fernández and Joe Biden at the White House, Minister Sergio Massa met with the number two of the International Monetary Fund, Gita Gopinathin a very delicate moment of the Argentine economy and when the board of directors of the agency is evaluating whether to approve a more flexible booking goals.

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According to sources in the Economy clarion, officials talked about the severe drought affecting the country and how to boost exports and said so There was no talk of changing any other targets beyond the already proposed flexibility of reserves.

“It was a very productive meeting,” the sources noted. The measures taken by the government were reviewed, such as financing with debt swaps and the disinvestment of maturities. And also the measures that are being taken to promote exports. “Always thinking about the future,” they said.

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“Good meeting with Minister @SergioMassa. We discussed the fourth program review, the severe impact of the drought and the importance of actions to increase reserves and continue to mobilize domestic finance in a sustainable way,” Gopinath tweeted at the end say the meeting.

Massa went to the Pennsylvania Avenue building to visit Gopinath, the agency’s first deputy executive director and de facto number two at the agency under her boss, Kristalina Georgieva, who was unable to receive the minister because she is on a business trip for Asia.

The meeting lasted an hour and a quarter and was attended by the head of the Economy Cabinet, Leonardo Madcur, and the IMF’s technical staff led by Luis Cubeddu. Massa and Gopinath have already met several times and are on good terms.

“Ahead of the IMF board meeting, we had a good meeting with the deputy general manager of the organization Gita Gopinath and his team, with whom we analyzed the impact of the drought in the country and evaluated the zeroing of the curve of maturities in pesos,” Massa wrote in a tweet.

“We both agree with the government’s decision continue to advance with measures that promote the increase of exports with the aim of strengthening reserves”, added.

The appointment is important because it happens when the agency’s executive committee is reviewing approval of the fourth review of the program with Argentina, in which a relaxation of the reserve target is proposed because the government cannot comply, due to the follow-up and other variables.

The board is estimated to approve the target change in a meeting, possibly this Friday, but the numbers could get even worse next quarter and even more flexibility from the Fund may be needed.

From Economics they discount that the staff reportert which has been raised by the technicians will be approved, because it is common for a drinkable paper to be raised in council if it is approved. But it is possible that the member countries, looking to the future, raise serious doubts about the Government’s ability to continue to achieve the objectives and to pay on time and in the forms.

The drought worsens, reserves continue to fall and in an election year there are fears that not even the fiscal deficit target of 1.9% of GDP will be met by the end of the year. The bottom, to have adopted an unusual flexibility in the Argentine case, He wants our country’s economy not to explode and that Fernández reaches PASO and the elections without problems. But shifting the deficit target is thought to be a line they don’t want to cross.

The role of the United States is fundamental, as, due to the size of its economy, it is the country that carries the most weight in any council vote on the matter. Gopinath will discuss all this with Gopinath this Wednesday, especially the future steps.

It is also very likely that the issue will be discussed in the meeting with Biden at the White House, because the Treasury Secretary will be present there, Janet Yellen, even if from Economy they prefer not to focus the debate on this, but to present Argentina as a country of opportunity and a possible strategic partner in food security, critical minerals such as lithium and even gas.

Undoubtedly, they will be referring to the Fund when they mention the constant request that President Fernández makes in various forums, namely that the organization reduce the interest surcharge charged to countries that have very large loans, such as Argentina. This idea, which would relieve our country’s debt, has already been rejected by the executive council and should not find echo in the United States. But the government will still insist.

In addition to Madcur, the meeting was attended by Guillermo Michel, director general of customs and Santiago

Massa will return to Washington very soon: the spring Assembly of the Organization and of the World Bank will be held in the week from 10 to 16, where ministers of the economy and heads of central banks from all over the planet will arrive. There, key issues for Argentina will continue to be discussed.

Meanwhile, the minister continues to “scratch the plate” – as they say in his delegation – in credit institutions such as the BID and the World Bank because the loans – even if for public works – come in dollars and are made in pesos. Every dollar counts when it comes to building reserves and meeting program goals. That’s why he talked about speeding up lending with the World Bank as well, in calls with President David Malpass and Axel von Trotsenburg, chief operations officer, on Tuesday.

Source: Clarin

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