Sergio Massa will have a week as his management has been since he arrived at the Economy Ministry last August. From oldest to youngest.
It will debut on Monday soy dollar 3 and it is expected to succeed by allowing the Central Bank to arrive with more air in April-May. Today, net reserves are lower than when the program started with the IMF almost a year ago.
Then, towards the middle of the week, the minister would arrive Washington to participate in the spring meeting of the IMF.
Finally, on Friday, the data of inflation of March. The question is whether it will give more than 7% or February (6.6%).
He soy dollar 3 of $300 will start trading from tomorrow. The intention of the measure announced by the minister last week is encourage exports and reduce the impact of drought on agricultural liquidations for the consolidation of reserves. It is an “agricultural dollar” which, in addition to containing a third round of the “soy dollar”, extends to regional economies. Producers will receive $300 for every dollar deposited (42% more than the official exchange rate). The program will last 45 days for soy and 5 months for regional economies.
The government has announced that it expects a $9 billion settlement. According to a report by the consultancy firm Equilibra, this amount would be composed as follows: during the 45-day duration of the soybean incentive, 7,000 million dollars would enter. And about 1,900-2,000 million dollars in the 5 months for regional exports.
According to experts, the biggest sales could happen soon. Given that the dollar will be worth $300 over the entire program and inflation will remain at a low of 6%, the incentive to sell today is greater than to sell tomorrow because production costs will rise.
in Washington, where you will be between wednesday and saturday, Massa will talk to the IMF authorities about the steps to take to receive the next disbursement due in late June/early July. It would be about 4,000 million dollars.
To receive that money, Argentina must meet first-quarter goals. Of the three (fiscal financing, monetary deficit and reserves), only the latter is on its way. “Despite the flexibility, a request should be made give up in the July review”, observes the economist Fernando Marull, taking into account that the reserve target for March “was made more flexible to 4.2 billion dollars from 7.7 billion dollars”.
The agency would allow silver despite Argentina falling short of first-quarter goals. Fiscal and reserve targets appear compromised. This is indicated by the market and sources familiar with the deal. That said, the line of work in the US on the economy this week will focus more on showing concrete gestures and announcements of measures in the direction of correcting the imbalances. Otherwise, Argentina will have the money but tension within the board will not only escalate, but may manifest itself. Especially from developed countries. He staff reportsreleased later this week, it included a graph showing Argentina has lower electricity prices for households than other emerging countries large and small.
“The IMF has asked Argentina to accelerate the devaluation of the official dollar and continue with interest rates above inflation; and also stop using reserves to control the parallel dollar“Marul adds.
On the fiscal front, the target set by the IMF is a primary deficit of $441.5 billion by March. Between January and February, Argentina accumulated a deficit of 432,072 million dollars. March deficit data will only come out the following week.
But since Massa already knows that the country will not meet the objectives to receive the 4,000 million dollars, it will be essential to put before La Cámpora the gestures that he must show with the organization and how he legitimizes himself.
The minister will participate in a meeting in Washington organized by Kristalina Georgieva and together with the finance ministers and central bank governors of Latin America, Canada and the United States. He is also planning a meeting with Gita Gopinath, the two of the Fund.
The week ends with the worst news for the Government. The BCRA Expectations Survey expects an inflation rate of 7% for March. For Ecolatina the record was 7.4%, the Libertad y Progreso Foundation 7.3%, C&T Consultores 7%, LCG 6.7% and Orlando Ferreres & Asociados 7.1%.
The IMF, which in its latest personal report maintained 2% growth for the year and average inflation of 76%, could already issue a downward correction to its projections for Argentina this week when it releases the World Economic Outlook report. “Revision of projections for Argentina will be needed”, agency staff said in their recent progress report on the program. The IMF estimated in its report that production of soybeans, corn and wheat will decrease by 15% compared to what is produced in 2022. These estimates are well above what the market expects.
Source: Clarin
