The government will face a more challenging scenario in the coming days. While the economic team moves forward explore financing for 15,000 million dollars from the IMF and foreign fundsThe following Tuesday a payment will be due of $ 1.3 billion with the multilateral organization amid increased demand for foreign exchange for the import payment and uncertainty about the next steps to exit the actions.
Regard first maturity of the capital since the Minister of Economy, Luis Caputo, resumed the agreement that fell through with the Fund at the end of last January, when Argentina received 4.7 billion dollars. That month it canceled $2.4 billion in commitments to various organizations, and in February another $2 billion, half of which went to the CAF. Another $640 million will have to be paid to the IMF in mid-April.
After receiving the director of the Western Hemisphere department of the Fund, Rodrigo Valdés, last week, Caputo will go to spring meetings of the IMF and the World Bank, that will be celebrated from Monday 15 April until Sunday 20th at the headquarters of the two organizations in Washington, as confirmed by official sources. There he could resume talks to negotiate a new agreement.
The economy is at a crucial moment marked by expectations in the dollar income from the rough harvest in the next 15 to 20 days and due to the end of the current import quota. These restrictions allowed the Central Bank to purchase $11 billion and reduce negative net reserves to $5 billion (discounting Bopreal payments over the next 12 months), according to JP Morgan calculations.
By generating new commercial debt, this scheme enabled defer payment of imports in installments (25% in January, 50% in February, 75% in March and 100% in April). This means, according to official sources, that Starting from April 13th, payment for all imports will be enabled for the first timewhich could require around $3 billion in the context of discussions on how to move from a shock program to a stabilization plan.
In the more immediate horizon, Caputo still has to review rates and move forward with the disarmament of securities. The minister committed to the IMF to present a new monetary policy at the end of April AND “reset” foreign exchange restrictions in June. The Fund believes the level of rates is too low, a measure that continues to liquefy income and savings in pesos and worsen the recession, according to a consultant who met with Valdés.
The official announcement was received last week by Milei, Caputo and Santiago Bausili. Not only did he ask to adequately “calibrate” exchange controls, to support the most vulnerable sections of the population in the face of the extent of spending cuts and to move towards “quality” adjustment. The Chilean also came to evaluate the possibility of new financing, which remains to be seen.
The minister responded to Valdés’ statements by announcing a new pension formula. AND excluding an imminent exit from equities, despite pressure from exporters, mutual funds and service companies, as revealed Clarion. Right now, the priority is to continue accumulating reserves and lower inflation, a trend that will become more complicated in March despite the “blender”, the hit to the pockets and the peg to the dollar.
The improving financial climate attracts foreign banks and funds, even if they do not yet seem willing to open their wallets. Their interest is in government bonds and whether the government will pay from reserves or restructure debt if it cannot access markets in early 2025. In other words, they want to know whether dollars will be sufficient to exit the recession or the “brake” will deepen to save foreign exchange on imports.
The issue emerged in meetings held in Buenos Aires by the head of the Institute of International Finance (IIF), Martin Castellano; the CEO of the American pension fund TIAA, Mark Patrick; the financial director of the Danish Export and Investment Fund (EIFO), Jørn Fredsgaard Sørensen; and the analyst of Sumitomo Mitsui Trust Bank, Anthony Venezia, who were received by the Minister of the Interior, Guillermo Francos.
They assure the Government that “they come for investments”. Francos has known them since the days of the IDB and Banco Provincia. But also They closely follow the reforms that Congress blocks, in particular the Basic Law. The issue emerged in the meeting held more than a week ago by the CEO of Santander in Argentina, Alejandro Butti, with the minister. And also in New York, where there were meetings with about ten funds, including BlackRock.
Source: Clarin
