The Ministry of Economy and the Central Bank will announce this Sunday a series of measures for the opening of tomorrow’s markets and after the meeting April inflation data of 8.4%, which was worse than expected. This Saturday, in a meeting on Economics that lasted several hours, Sergio Massa, Miguel Pesce and their teams Evaluated a package that includes: the increase in BCRA interest rates, which could come into force tomorrow and reach 100%; Economic measures aimed at macroeconomic order and spending; ads for tax relief for specific sectors and also for recover consumption and hold the economic activity.
In that meeting, according to official sources, The possibility of the Government promoting a “flat-rate increase” has not been studied for employees of private companies and the public sector, as requested at the PJ Congress in Buenos Aires by the deputy Máximo Kirchner. Despite the claims of Kirchnerism, the Government and the CGT always agree that the increases should be dealt with in joint negotiations.
Massa is also working on measures for strengthen the reserves of the Central Bank. At the end of the month the minister will travel to China negotiate the renewal of exchange of coins between Argentina and that country (the mechanism known as swap), which serves the BCRA to swell its reserves and also because Argentine importers they can pay for their purchases in yuan and not in dollars.
In China, Massa will also ask permission from the BRICS (the set of countries that make up Brazil, Russia, India, China and South Africa) so that the bank created by these emerging powers out of guarantee so the Development Bank of Brazil (BNDES) pre-finance product sales in Argentinaso that the Center avoid turning dollars be able to pay them. Massa will also ask for a guarantee from the BRICS bank for the BNDES finance the sale of pipes for the pipeline Nestor Kirchner.
In turn, the economy negotiate with the IMF an outlay of US$ 4,000 million higher than that foreseen for the month of June, which would consist of an advance of the payments foreseen for this year.
A month ago, INDEC published that March inflation had been 7.7% and this sparked a currency rush that the price of the blue dollar has increased by 20% in the month and that he also confirmed that the economy and the minister’s plan are more fragile than many perceived.
Under the impact of that bullfight, the consequences of which still persist in the government, and after learning last Friday the data on inflation for April (8.4%) -again, higher than expected-, Massa met his economic team yesterday in the same building as the Ministry of Economy. The idea is to prevent tomorrow from being negative for the Central Bank.
After April’s index, analysts expect the CPI for May to hover around 9%, although some believe it could hit double digits.
On Friday, José Ignacio de Mendiguren, the industry minister, announced that the economy minister would start working on inflation. Before the INDEC announcement, the “Basque” had said: “Everyone is talking that it won’t be a good index and we will deal with it. Tomorrow Sergio (Massa) will go into action, as he always has,” he told El Destape Radio.
The meeting that Massa convened this Saturday at the Ministry of Economy was attended by De Mendiguren himself and, in addition, by his second Gabriel Rubinstein; Chief Advisor Leonardo Madcur; Treasury Secretary Raúl Rigo; and Finance Eduardo Setti, who has also been in charge of the Central Bank’s money table since the bullfight at the end of April.
The head of the Central Bank, Miguel Ángel Pesce; that of AFIP, Carlos Castagneto; that of customs, Guillermo Michel; from INDEC, Marco Lavagna; Matías Tombolini, head of the Ministry of Internal Commerce, and the Secretary of Energy, Flavia Royón.
Source: Clarin
