International Central Bank reserves continue to generate restlessness among private analystsdespite having recently reached its highest level in more than two years. In a recent report, Adcap Grupo Financiero warned that the reserves are in half of the suggested as prudent by the parameters established by the International Monetary Fund (IMF).
As revealed by the report, excluding coin swap with Chinathe gross stock is around U $ 28.2 billiona figure well below the parameters suggested by the agency for a country with the characteristics of Argentina.
The focus on reserves
The study, prepared by Eduardo Levy Yeyati and Federico Filippini, argues that the 2016 guide of the IMF on the evaluation of the adequacy of reserves (ARA) continues to be the standard reference to determine the optimal level of reserves. This tool, oriented to emerging economies, contemplates eventual Shocks derived from foreign trade, capital movements and liquidity tensions.
Among its key components are: short -term debt, other portfolio liabilities, broad money (dollars) and export revenues.
The ADCAP report details that, according to this formula, Short -term debt equals AU $ S18.3 billion; The other liabilities, to U $ S314,000 million; broad money, to U $ 30.6 billion; and exports, to U $ S73,600 millions.
In this way, the report estimated that the level of “optimal” reserves is between U $ S78.7 billion For a fixed exchange regime and U $ S57.8 billion for a floating one. The current level of reservations, without considering the Swap with China, reaches only between the 36% and 49% of those values. According to the study, the appropriate level should cover between 100% and 150%.
“Given the strongly managed exchange rate of Argentina – at some intermediate point between a crawling PEG and a dual system – a reasonable midpoint could be US $ 68,000 million. That would imply more than duplicate current reserves,” explains the study.
The Government requested a “waiver” to the IMF to unlock a turn of US $ 2,000 million
The Argentine government presented this week before the International Monetary Fund (IMF) a formal application to obtain a “Waiver” for not having fulfilled the goal of accumulation of reserves. The management was in charge of the Secretary of Finance, Pablo Quirno, and the Deputy Minister of Economy, José Luis Dazawho traveled to Washington with that goal.
The dispensation, which was not yet approved but is high likely to obtain green light, is key to Unlock a disbursement of US $ 2,000 million corresponding to the first review of the Extended Facilities Program (EFF), whose total amount amounts to U $20,000 million. However, the agency’s summer break could take both approval and sending funds until September.
The conversations between the IMF and the Argentine economic team still failed to close the Level Agreement (SLA), an essential step for the Board of the Fund to evaluate the results of the first review.
The original program set as MEta the accumulation of US $ 4,700 million In reservations for the second quarter of 2025, an objective that was not achieved. Voices close to negotiations explain this detour for a series of factors: debt matches, the non -issuance policy – which reduced the amount of pesos available to buy currencies – and the restrictions imposed by the Executive, including the decision not to intervene in the exchange band until the dollar reached the $ 1,000, value that marks the runner’s floor.
Source: Ambito
