The International Monetary Fund’s technical team continues this week to virtually negotiate with Economy officials, but there is still no news on the outlay of at least 10,000 million dollars that the government seeks to alleviate the dramatic decline in reserves.
An agency spokesman said on Monday “The technicians from the IMF and the Ministry of Economy continue to work constructively strengthen the program supported by the Fund in the context of the very severe drought”.
“Discussions are ongoing virtually and the teams are expected to hold several meetings this week to move forward with the programme,” he added.
almost a month ago, Minister Sergio Massa and the number two of the Fund, Gita Gopinath, have agreed in Washington to review the original program signed by former minister Martín Guzmán because it could not be realized as it was. THE severe drought afflicting the country was the cause mentioned “put everything on the table” again, while reserves have declined and inflation has soared, two variables that still cannot be controlled.
Minister Massa is looking for a lifeguard who will allow him to oxygenate himself the economy before STEP and at the same time give him political support if he were to run for president of the Frente de Todos.
The Fund is ready to help, but we still don’t know how. Other targets could be relaxed (they have already made reserves more flexible, but they could also do it even more), defer deadlines and other maneuvers.
But The minister’s best wish is that the Fund advances the planned disbursements until the end of the year – which add up to about 10,000 million dollars – to be able to face the pre-election months with more peace of mind and fresh money.
It should be noted that the Fund has not said anything about what is being negotiated. He doesn’t want Argentina’s economy to explode, but is reluctant to give away such a large sum of money at a time when there is a high chance it will vanish quickly in the heat of elections. Moreover, while the United States has given the green light to a change in the program, other members of the council are suspicious of Argentina’s continued requests.
Massa expected to resolve the issue in two weeks, but times are getting longer and there’s no news. Although the negotiations are still online, it does not seem that the closure is imminent at the moment. The Argentine technicians were supposed to come to Washington last week to refine the final details, but they traveled to Brazil to test a relief that didn’t work.
While the reserves continue to fall and the negotiations continue, the minister has recently specified some of the points that are agreed in the original program with the Fund: he implemented the restructuring of electricity subsidies and the official dollar rose with the pace of inflation.
But, beyond the government’s haste, the new program is still undefined. It must be admitted that it is not even easy: any variable touched in the program implies the recalibration of all the numbers, while the Argentine economy undergoes dizzying changes every day.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.