Former officials and sources aware of the negotiations between Argentina and the IMF, they agree that the international organization will propose to Minister Silvina Batakis an adjustment of the dollar price as a mechanism to increase the accumulation of reserves and save the program.

Sure. The IMF’s appeal to Batakis for a higher dollar will not be made public, as is customary. The body fixes its positions in this type of encounter through technical documents that it makes available to countries. In fact, in the latest staff report, he had already warned that the dollar price in Argentina is lagging behind.

In addition, it is expected that tomorrow the declaration of the Fund is a courtesy greeting and welcome to Batakis. There will be time for a deeper confrontation.

The economist will be accompanied by his number two, Karina Angeletti.

In any case, compliance and monitoring of the program will be on the agenda tomorrow. And therefore the outlook for the dollar price.

One of the goals that seems more difficult to achieve in the current program is to raise $ 5.8 billion in reserves with a 160% spread. The IMF recommends raising the dollar price in this type of case.

The next revision of the plan will be in September. Argentina met its fiscal and financial targets in the second half of the year. But not the accumulation of reserves.

Originally, in the agreement signed by Martín Guzmán, it was foreseen that Argentina raise $ 4,100 million in reserves until June. Subsequently, the IMF agreed to lower it to $ 3,450 million. Finally, Argentina reached $ 2,950 million. Just like the IMF, it is expected to be satisfied. The country will argue that it is because the IDB is delaying a $ 500 million outlay. Its director, Mauricio Claver Carone, justified in a meeting Wednesday the reluctance to change by arguing that Argentina is a “Insolvent” country..

“The second quarter goals will be fine,” says a source familiar with the negotiations. “But there will be a conversation between Batakis and the IMF about how it intends to reach its annual goal of accumulating $ 5.8 billion with a 160% gap.”

The IMF explains that Guzmán was too expansive in the first half of the year. Not only fiscally – the deficit level in the same period was double that of last year and in 2019 there was a slight surplus – but also in terms of exchange: a delay was generated which brought imports to an all-time high. The IMF speaks of an “overheated” economy and what for Miguel Pesce is the fault of imports, for the staff of the organization is the product of not increasing the dollar.

In the latest information report for Argentina, the Fund estimated that the exchange rate for a baseline scenario would imply a devaluation of 35%.

“The current exchange rate is very similar to that of April 2018, It’s hard to say it’s not late”, Says Javier Alvaredo, director of ACM and former Deputy Minister of Economy.

Miguel Kiguel, director of Econviews and former finance secretary, agrees. “The problem of exchanges and reserves is very serious, unsustainable. The IMF will ask for something there, it cannot work with a 160% gap“.

The same also thinks Rodrigo Alvarez, economist. “This official dollar is unsustainable.”

“The IMF will ask for a fiscal signal, a higher rate and raise the dollar,” says a source familiar with the negotiations.

For Héctor Torres, former representative of Argentina before the IMF, “the meeting of Batakis with Kristalina Georgieva gave rise to a friendly communication, even if of little substance. Batakis will certainly explain to the director that it will be necessary for the Fund to agree to “recalibrate” the objectives. But they will reply that first it is necessary for the government to say how it intends to “recalibrate” the policies originally envisaged in the program “.