The Board of Directors IMP He will meet this week, on Thursday, in the previous break, to approve the staff report closed with Argentina in recent days.
The data is not less for two reasons: on the one hand, The government has just modified the reservation goal for the month of September And he needs the agency’s guarantee, since the US $ 9,000 million they look distant and if they were not negotiated, they would need another “waiver” or dispensation of the fund; On the other hand, the head of the Board of Directors depends on the Us $ 2,000 million disbursement that appears in the agreement and that should arrive this week.
President Javier Milei faces a crucial challenge to maintain the stability of the dollar in the face of mid -term elections in October. With the aim of reaching the elections with a controlled exchange rate, the government has implemented pragmatic cutting measures: for example, The recent reduction in agricultural exports withholdings. The objective is that the agricultural sector liquidates an estimated US $ 12,000 million. This strategy seeks to strengthen the coffers of the Central Bank, avoiding an exchange escalation that could undermine electoral trust.
I turn to heterodoxy and Pragmatism Plan 2.0
The reduction of retentions, which It implies a fiscal cost of to a point of the GDP, It marks a turn to heterodoxy, moving away from the fiscal surplus dogma that characterized the first months of management. By encouraging producers and agro -exporters to sell their crops called in dollars, The government expects a currency flow that maintains the dollar inside the flotation band, currently in the $ 1,280 area. This measure not only responds to pressures from the agricultural sector, but also reflects the need to consolidate the support of the center-right electorate, key in the political base of Milei.
The reader understands that the agricultural sector, With its ability to retain US $1,000 million in grains without liquidating, It has a determining role in exchange dynamics. The reduction of retentions is a direct wink to this sector, but its effectiveness depends on the disposition of the producers to be liquidated. The recent flexibility of the exchange rate for natural persons has triggered purchases of dollars for about US $ 2,000 million in the last month, which could counteract foreign exchange income if it is not managed with higher income.
The international context also plays a key role. Minister Luis Caputo has already received an initial disbursement of US $ 12,000 million from the International Monetary Fund (IMF) in April, as part of a program of US $20 billion to support the transition to a more flexible exchange rate.
As mentioned above, the last week the IMF announced an agreement at the technical level that would enable a new outlay of US $ 2,000 million, reinforcing the reserves of the Central Bank. This financial support is essential to comply with reservations accumulation goals, although the government Face pressures to avoid a new waiver in Septemberwhen the target of net reserves of US $ 9,000 million is probably not reached. For that reason, as transcended by the Minister himself, the Government and the IMF would have modified the goal of reserves for September. “The new agreement will like the market …”, the official slid.
Dollar, IMF, the new goal of reservations and the minister’s sayings
The need to renegotiate reservations with the IMF arises from the difficulties in meeting the quarterly objectives, especially after a period of non -intervention of the central bank in the exchange market. Since June, the Treasury has accelerated the purchase of currencies, acquiring a figure that exceeds the US $1,000 million long.
The government combines pragmatism and heterodoxy to navigate this scenario. The reduction of retentions, although ideologically aligned with the decrease in the tax burden, responds more to an electoral need than to a purely libertarian conviction. The priority is to avoid a dollar shooting before October, which could destabilize the economy and affect the electoral chances. However, this strategy implies risks, such as a potential inflationary rebound if the exchange rate is approaching the ceiling of the flotation band, a factor that the IMF has indicated as a critic.
The agreement with the IMF, which includes A third expected disbursement of US $ 1 billion for Novemberseeks to provide a financial mattress to sustain exchange stability. However, the sustainability of the program depends on the government’s ability to convince the IMF of Recalibrate reservation goalsavoiding a waiver that could weaken the confidence of the markets. The accumulation of currencies, supported by the liquidation of the field and the IMF funds, is seen as essential to generate predictability in an electoral context where the dollarization of portfolios is usually intensified.
In summary, the Milei government bets on a delicate balance between exchange stability and electoral needs, using heterodox tools such as the decrease in retentions and the support of the IMF to strengthen reserves. The capacity of agricultural producers to liquidate currencies, together with the management of negotiations with the IMF, will be decisive to avoid exchange tensions before October.
Source: Ambito
