The former director of the Central Bank (BCRA) spoke about debt maturities and the concerns circulating in the market. Also, he provided his inflation forecast.
In the last hours, it was announced that the Ministry of Economy is finalizing details with banks, insurers and mutual investment funds (FCI) to take off the burden of public debt maturities. In this context, the former director of the Central Bank (BCRA), daniel marxspoke about this issue and the concerns that are circulating in the market, at the same time that he warned about the role of politics when generating greater uncertainty.
Debt and maturities
“There are very strong maturities in the second and third quarters. I think it is a situation where in principle it is not comfortable, there are countries that have much more solvent debt indicators, with less liquidity problems. But Argentina has another issue, which interest rates in foreign currency are relatively high and you cannot access the market,” he told Radio 10.
“It is a situation typical of Argentina with credibility problems around how the debt is going to be managed, that is tied to Argentina’s history of defaults and the prospects, what the future of Argentina is going to be like with an economic program. In Third, is politics. If one were to look at the debt numbers in terms of amount and maturities and transfer them to another country, they would not have these uncertainties.. The democratic agreement enriches the possibilities instead of adding more uncertainty”he claimed.
In the last few hours, a statement from Juntos por el Cambio circulated warning about the debt swap: “due to the serious risks it implies.”
The economist, head of Quantum Consulting, predicted a “complex year” in terms of inflation, while indicating that election years tend to generate “greater uncertainty. This makes people spend money or look for alternatives like the dollar.” Among the factors that will put more pressure on the price index, he mentioned the reduction of subsidies.
Is the IMF lax?
As recently announced, the Ministry of the Economy is discussing with the International Monetary Fund (IMF) to modify the reserve goal. In this sense, Marx described the current role of the IMF with Argentina: “the IMF after the 2008-2009 crisis greatly increased the loans it gave to countries. Argentina in 2015 onwards when it sought the money from the IMF obtained volumes that before there was no way I was going to get in. Some call it lax. Now the IMF does not want to be seen as responsible for Argentina’s problems either. Today is a difficult credit administration. The IMF is contemplating today, but ultimately its recipes have not changed much, it emphasizes fiscal matters and politics.”
Within this framework, he affirmed that the renegotiation of goals will be positive: “fulfillment of reserve goals is compromised in March and perhaps in June also due to the drought and other things. Other goals will also be discussed, such as the fiscal one as a result of the rise in inflation. It is better to review goals than request waivers, waivers come after non-compliance.”