President Javier Milei confirmed yesterday the start of negotiations with the high-level delegation of the IMF. The mission has been underway since Friday and there have been some before meetings between the technical teams of the IMF, those of the Ministry of Economy and the Central Bank started on Friday and continued throughout the weekend.
“In principle, the idea is to revoke the agreement that fell due to non-compliance and reach an agreement at the staff level (an agreement at the technical level),” explained business sources. Clarion.
The Minister of Economy, Luis Caputo, and the head of the cabinet of ministers, Nicolás Posse, will conduct the first meeting today with the intention of postponing the first deadlines of this year, which will take place on January 9 and 16, which They amount to $1.3 billion and $650 million respectively.
The meeting was originally announced for last Thursday, but was postponed until next Monday to allow for technical meetings between the Fund and the teams of the Central Bank of Argentina and the Ministry of Economy.
The idea is to resume the continuity of the current agreement with the institution, through the request for pardon or waiver and with pre-established payment transfers, or to reformulate it. By the way, the current agreement, which is declining, provides for the expected but interrupted disbursements from November 2023. The pending disbursement amounts to $3.4 billion.
Maturities with the Fund for 2024 The total is approximately $7.7 billion. Almost 40% of this amount, as this newspaper published yesterday in its edition, is interest before the IMF which, in line with the world, has also raised the rate, which is 4%.
The government authorized the issuance of Central Bank bonds for 3.2 billion dollars with a ten-year duration, given “the proximity of the maturities of the debt commitments”.
As happens in these missions, the IMF is likely to meet representatives of the opposition, workers, business and market analysts.
The refinancing agreement signed in March 2022 amounted to $43,491 million at the end of the third quarter of last year, an increase of $3,271 million compared to the second quarter.
Milei declared it yesterday expects an outlay from the IMF to have more flexible macroeconomic management, which would allow for the development of a more vigorous (economic) stabilization programme.
In this sense, Milei was forced, after the presidential transition last December, to resort to a short-term loan from the Latin American Development Bank CAF for 960 million dollars to pay the December 21 deadlines.
The IMF did it supported the measures which aim at fiscal adjustment, cutting public spending and containing monetary output.
Indeed, some analysts predict that the economic program will go beyond what the agency requires to meet debt service. Kristalina Georgieva gave her support to the package of measures that aim to eliminate the fiscal deficit and achieve a primary surplus that allows for the servicing of debt in foreign currency.
“I won’t necessarily participate”
In the interview with Radio Mitre, Javier Milei spoke briefly about the next meeting with representatives of the International Monetary Fund scheduled for today in Buenos Aires. In this sense, he said it “not necessarily” will attend the meetingbut he did not close the door on his presence in the following days.
The President mentioned a request for funds from the IMF for the economic stabilization program. The arm wrestling is used to unlock a disbursement.
Source: Clarin
