Guzmán has agreed with the organization’s negotiators on a long series of mechanisms that hint at a demanding structure of control and supervision, a kind of guarantee of co-government from now on with the Casa Rosada.
It is known that the program will be supervised through quarterly reviews and previous actions. But the fact that has not been taken into account until now is that there will be “quantitative performance criteria, indicative objectives and structural reference points”.
Within the framework of the announced fiscal objectives, the Government will undertake to take care of a “floor” of the primary balance that will be cumulative, but also subject to adjustments for capital and social spending. It will also undertake not to accumulate “arrears” in external debt payments.
Other details about the agreement include an annex that will be sent to Congress: in that annex it will say that it is asking the IMF for a whopping US$44,807 million in the equivalent of Special Drawing Rights (SDR), very close to 1,000% of the quota that corresponds to Argentina in the organism. The commitment that Guzmán will take is for 30 months within the framework of an Extended Facilities Agreement with “exceptional access”.
In this way, says the minister, it will be able to meet large balance of payments needs, bolster the reserve position, and strengthen macroeconomic stability. With this agreement (with this borrowed money) the Government indicates that it would cover the remaining repurchase obligations under the 2018 Stand By Agreement. In addition, Guzmán will request additional financing of US$4 billion to stabilize the very low levels of international reserves.
Thus, and before the maturity of US$2.8 billion takes place on March 22, Economy would request that the Fund make this disbursement together with US$4.0 billion in order to obtain a “confidence” effect in the BCRA.
In the negotiations, technical differences still prevail, for which the Staff Agreement would not have been formally announced tomorrow.
Source: Ambito
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