The IMF today defines an outlay of 4,000 million US dollars and new adjustments to the program

With a mixture of expectation and uncertainty, the government awaits the decisions that the IMF will take this afternoon. The board of directors of the agency will meet to evaluate the development of the program and define the next steps, discussions which, if successful, will allow the entry of an outlay of 4,000 million US dollars and a readjustment obviously in the face of increasing difficulty meeting annual goals.

The conclave, confirmed by sources in Washington and by the Ministry of Economy, will be chaired by Kristalina Georgieva and the Fund’s directors, who will issue an opinion on the agreement reached on June 8 between the staff and Martín Guzmán, a statement Reflecting the decision of the finance ministries of the main powers with one seat in the body, among which the US concentrates 16% of the votes.

According to staff, Guzmán met fiscal, monetary and reserve targets in the first quarter, but Fund spokesman Gerry Rice acknowledged that there will be a revision of the fiscal deficit level and reserve build-up for the second quarter. to reflect the war shock, without changing the annual guidelines. “The board always works back and forth, there is no problem backward, let’s see how it continues,” they said in Economics.

The minister aims to ease requests in the face of difficulties in respecting what has been planned in the last three months. The Central Bank continues to lose reserves and already in June accumulated a red of 500 million dollars on the foreign exchange market, which led Cristina Kirchner to ask for a tightening of controls on imports. Public finances are also worsening, with a primary deficit of 191 billion dollars in May.

After paying $ 2.7 billion this week, the easing of targets would allow Guzmán to avoid a waiver in the second quarter and, therefore, a default just two months after the agreement was signed. and the 2022 budget decree, with a more moderate expenditure “We hope there is no renunciation”, slip into the Economy.

The head of the Treasury on Wednesday acknowledged that there has been a “deviation” in the targets, but that will be corrected in the coming months. It was during a meeting with the banks, a sector that could come to define its fate in next Tuesday’s debt auction, where the Economy will have to renew maturities for 243,000 million dollars after the investors exit from the pesos bonds, a shock that can complicate the program with the IMF.

The Fund knows that neither the original projection of energy subsidies nor inflation will be met. The budget now expects a CPI increase of up to 62%, below the 72% expected by the market. The body would turn a blind eye to these problems, but will require additional measures to maintain annual targets in 2022 (a primary deficit of 2.5%, a monetary issue of 1% and $ 5.8 billion of accumulated net reserves. ).

In Washington they ask Guzmán to accelerate the devaluation rate to stop the loss of reserves. In Economics, they suggest keeping it below inflation, even if the data managed by the minister on the exchange rate in relation to the main trading partners corrected for inflation show a worsening of 7.35 points over the year. Economists estimate a $ 2 billion reserve gap beyond the target through June.

The IMF also wants rates to exceed inflation. The BCRA has raised the benchmark rate (28-day Leliq) to 52% and the fixed terms to 53% so that banks can place their excess deposits in central and Treasury debt. The retouching, however, would not be enough. For example, the 28-day Leliq annual effective rate is 67%, three points below the market expectation of annualized inflation over the next three months, according to ACM.