IMF board meets to approve new reserve targets and disburse $5.3 billion

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The executive committee of the International Monetary Fund will analyze this Friday in Washington the fourth revision of the program with Argentina, which includes a relaxation of the booking objective in the future because the government cannot satisfy it. Everything indicates that the way will be paved for a new outlay – about 5,300 million dollars— but the observations of the member countries are eagerly awaited, in a context of severe drought and dramatic shortage of dollars.

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Although the Fund’s calendar only shows that the board will discuss this Friday the loan to UkraineSources of Economy ensure that it will also deal with the Argentine case. In addition, a spokesperson for the agency confirmed clarion that the deadlines that the country had last week have been postponed”Until March 31st” precisely on the day of the key meeting that would have given the disbursement.

Two weeks ago, on March 13, the Fund’s technical staff evaluated –together with the Economy team– the performance of the last quarter of the year and declared that the reserve, fiscal and monetary objectives have been achieved. But the assessment was for the end of last year, when the drought wasn’t that bad.

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As well as in that review are facts future predictionsIn the document they submitted for approval to the board of directors, they spoke of an agreement to loosen up the reserve accumulation target set out in the original program, a measure that will give the government a break in an election year, which has seen it as impossible to reach the initial goal due to worsening drought and lower activity.

In return for this flexibility, the Fund also asked the Government in the document “Stronger policies” AND accelerate the reduction of energy subsidiesespecially the wealthier sectors.

In Economy they are confident that the review will be approved and therefore the 5,300 million dollars that will be used to pay the deadlines will be released. They have the support of the United States, which is the largest contributing partner and the one with the most voting power. The approval was reportedly renewed by President Joe Biden and Treasury Secretary Janet Yellen in a meeting they held with President Alberto Fernández, Minister Sergio Massa and other White House officials.

But there is strong resistance from other similar countries Japan, Germany, Holland and others who do not welcome the concessions that have been made to Argentina and could add some critical points to the final document. In a meeting that the minister had on Wednesday with the number two of the organization, Gita Gopinath, the measures that the government will take to continue accumulating reserves and leave a path of initiatives that the council can see for the future were being refined.

The agency is focusing above all on electricity subsidies because they want more speed in the application of the regime and they expressed it in the press release dated March 13th. The board of directors is estimated to be filing a complaint to that effect because it was due to conclude in February. In Economy they believe that the scheme will end in May for families with higher incomes. In the energy package, they point out, there could be savings of around 4 billion dollars, which also includes the completion of the pipeline.

In this context, Massa also announced other targeted measures this Thursday in Washington strengthen reserves. He said the export regime would be expanded with the “agricultural dollar,” which would temporarily extend beyond soybeans to other regional products.

And he also announced that they will try to simplify the various exchange rates so that they don’t have as many varieties of dollars as Qatar, Coldpaly, Malbec and others. The idea of ​​multiple exchanges is something that goes against the dogma of the agency, but until now it has tolerated it with “waivers” or thanks because – like the soy dollar – it is a “creative” resource that has served to support reserves in red.

In a bid to get more reserves, the minister also aims to get $3 billion from international organizations for the Central’s coffers, they said in Economy.

Even with these measures, Economy calculates that there will still be about $3,000 million left to finish moving smoothly in an election year where there can be a lot of political uncertainty and struggle.

Source: Clarin

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