Dollar, drought and debt swap, axes of the meeting between Massa and the IMF

Dollar, drought and debt swap, axes of the meeting between Massa and the IMF

The Minister of Economy, Sergio Massa, held a meeting on Wednesday with Gita Gopinath, deputy managing director of the International Monetary Fund. According to official sources, The meeting was positive and the approval by the Board of Directors of the review corresponding to the fourth quarter of 2022 is expected.

The meeting lasted more than an hour and a half and the current economic situation was analyzed, particularly the severe impact that the drought is having on the economy, described as the worst of the century. In this regard, at the Palacio de Hacienda they had been working with the IMF staff on the implications caused by the drought in terms of exports and income due to lower collection.

In this sense, the estimates were modified: “last year we worked with an assumption of drought, which later became serious and now turns out to be the most important of the century”, agreed the participants in the meeting with the staff of the Fund.

In this regard, Gopinath, through social networks, reported that he maintained a “good meeting” with Minister Massa. He added that: “the fourth review of the program was discussed, the severe impact of the drought and the importance of actions to increase reserves and continue mobilizing internal financing in a sustainable manner”in what was the only official statement from the Fund about the meeting.

In this sense, it was already known that the agency agreed to modify the reserve goal -the amount will be disclosed once the Board approves the staff report-. This modification of the reserve goal will have “a significant impact in the first quarter, which is when the greatest effect of the drought occurs.”. Although they clarify in official sources that “Although the reserves will be recomposed throughout the year, the final result would be less than initially agreed”.

It should be remembered that in March the BCRA’s net reserves, according to the original agreement, were to be at USD 5.5 billion. As a reference, private estimates indicate that, after the bleeding of currencies suffered by the monetary entity, the net reserves would currently be below USD 2,000 million. The target for June was set at USD 8.6 billion and for September USD 8.7 billion.



For his part, Massa, also through social networks, commented that in the meeting with the authorities of the Fund “the clearing of maturities of the curve in pesos was valued”. The head of the Palacio de Hacienda, in a statement, commented that he had agreed with the representatives of the IMF “in the importance of the government’s decision to continue advancing with measures that promote the increase in exports with the aim of strengthening reserves”.

It is estimated that Economy will implement as of April a differential dollar for certain exportable products, particularly agricultural.

It should be remembered that in its latest press report, the IMF stated that “efforts will continue to ensure external competitiveness and strengthen reserve coverage, which the economic leadership plans to complement through the timely rationalization of the exchange rate policy.”

Something that caught my attention was the presence of Guillermo Michel, director of Customs, in the meeting with the authorities of the Fund.

The reason: The IMF technical team closely follows the actions of Customs in its task of disrupting over and under-invoicing operations.

For the staff, According to sources from the Argentine entourage, there was a festival of imports and an excess of



Despite the fact that analysts consider that Argentina needs additional funds, according to sources in Washington, this issue was not dealt with.

At first, as far as he could tell Ambit, Modifying the fiscal goal of 1.9% for this year would not have been analyzed, an objective that is, a priori, quite difficult to meet according to analysts. The impact of the drought will reduce tax collection by more than USD 6 billion, according to the Rosario Stock Exchange.

The fact that the modification of the fiscal goal has not been dealt with does not mean that the Palacio de Hacienda is not thinking of proposing a reconsideration later, given the impact, both direct and indirect, of the drought on the economy as a whole.

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A few days ago, the IMF spokesperson, julie kozacIn his first press conference, he remarked that “in our opinion prudent management is necessary to improve the functioning of the domestic bond market.” Economic leadership sources specified to Ámbito that this operation “was not objected to by the Fund”

Once the Board meeting is held, the disbursement of USD 5.300 million dollars will be finalized, which is estimated to be effective next week.

At the meeting, Massa was accompanied by the Head of Advisors, Leonardo Madcur, besides Michael.

Source: Ambito

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