The government manages to revive the agreement with the International Monetary Fund and the organization disburses 4.7 billion dollars which allow it to be paid and clear the financial horizon Short term.
The Central Bank bought 6 billion dollars that allow you to get started cancel debt with importers, even if net reserves remain in the order of 6.5 billion dollars.
For the Marina Dal Poggetto consultancy, the survey of the last week of January was significant a 1% increase in the food and beverage category, which indicates a sharp slowdown compared to previous weeks.
The agreement with the Fund essentially implies the deepening of fiscal adjustmentwith tariff increases to reduce subsidies and a commitment to maintain a competitive dollar this allows the Central Bank, after slowly easing the exchange rate, to accumulate reserves of 10,000 million dollars.
The Government is committed to addressing an orthodox adjustment that includes a sharp decline in the purchasing power of pensions and a reduction in pension spending to regain confidence and increase demand for pesos.
In the latest EcoGo report there are alarming data on the level of pension spending: spending on social security benefits, which in December 2017 represented 9.6% of GDP, fell to 6.8% in December 2023 and, With ongoing liquefaction it could fall to 5% of GDP and with many more pensioners.
While the IMF is committed to making the peso gain confidence, at the same time the President stated in two reports to foreign media that Argentina it is closer todollarization.
He argued that the Central Bank has purchased $5.9 billion since the beginning of his rule and that the monetary base amounts to $7.5 billion, so, for Milei, all that remains is to finish resolving the paid liabilities .
Milei returns to the charge with dollarisation while expectations on what the real exchange rate will be at the end of March from a inflation which remains around 20% monthly with the official dollar growing at 2% monthly.
Also the need for a peso devaluation in the near future Another rift has opened between those who argue it will be necessary for the Central Bank to earn reserves and those who prioritize a fixed, if overdue, dollar to use the exchange rate as an anchor for inflation.
Economists who defend a high and competitive exchange rate favor the entry of dollars to gain support for the BCRA and reach the reserve target set by the IMF.
They believe that the government will not be able to maintain the plan to increase the dollar by 2% per month and that this will devalue or accelerate the pace of growth. creeping picket.
Supporters of a fixed exchange rate, even at the cost of being left behind, underline this the important thing is to lower inflation and that, for this reason, it is essential to have a stable dollar.
This week, former minister Domingo Cavallo said the government should not devalue.
There are economists who say they have listened Pablo QuirnoMinister of Finance, recommends Fernando Marengo’s note in Clarion with a defined position in favor of non-devaluation and maintenance of the fixed exchange rate.
The clash between these planets could be important and the Government, with the postponement of the full application of the fuel tax and the increase in gas, has given some signs of wanting to moderate the increase a little February price index.
The devaluation and inflationary flight of December and January have devoured the purchasing power of pensions and salaries and shortly afterwards there is already discussion about whether it is necessary another jump in the dollar that could trigger another jump in prices.
The government has devalued it favored the recomposition of companies’ profitability marginsit agreed with the IMF and gained reserves, but still failed to dispel doubts on the matter if the adjustment that he launched will prove feasible.
Source: Clarin
