“We are going to use all the tools,” Massa promised. The BCRA acted in the bond market. The CNV and the FIU raided an Alyc. The Fund confirmed that it is negotiating the redesign of the program.
In the midst of a new day of strong exchange rate tension, in which the blue dollar reached close to $500, the Government reacted on different fronts. The Minister of Economy, Sergio Massa, promised to use “all the tools of the State to order this situation.” The main decision involved laundering a new Central Bank intervention strategy on financial dollars through the use of reserves to act in the bond market. Simultaneously, he sent the National Securities Commission (CNV) and the Financial Information Unit (UIF) to carry out inspections in Stock Market companies. In addition, Massa confirmed that he is negotiating with the International Monetary Fund a change in the disbursement scheme to reinforce the reserves.
“For several days we have been experiencing an atypical situation of rumors, versions, false reports and their consequent impact on financial instruments linked to the dollar,” said the minister on his Twitter account. And he emphasized: “We are going to use all the tools of the State to order this situation and in this sense we notified the IMF of the restrictions that weighed on Argentina and we are going to change in the rediscussion of the Program.”
This last point seemed to refer to the change in the intervention strategy on the MEP dollar and the CCL. It is that yesterday, the BCRA came out to intervene with dollars in the bond market, according to market sources. It would have been at Massa’s request. As Ámbito was able to reconstruct, the minister notified the IMF of the operation since in the last revision of the Extended Facilities program a clause was included that prohibited this type of intervention with foreign currency from reserves.
In his message, the head of the Palacio de Hacienda also tried to give signals that there will be reinforcements to international reserves, whose scarcity is at the base of exchange fragilities. “We are going to continue with the multilateral agreements, exporters with the transformation of exports into yuan and the disbursement agreement with the IMF to strengthen the reserves that were affected by the impact of the drought,” Massa tweeted.
As this newspaper had anticipated, in addition to a reformulation of the goals of the program, the Government is negotiating with the Fund a modification of the disbursement scheme. One of the possibilities under discussion is an advancement of the transfers corresponding to the third and fourth quarters. Tomorrow a team from the Economy will return to Washington to advance the discussions.
In this regard and after Massa’s message, the IMF issued a brief statement in which it confirmed: “The technical staff continues to work with the Argentine authorities to strengthen the economic program agreed with the country in the context of the very severe drought.” “The exchanges between the authorities and the International Monetary Fund team are progressing constructively,” added a spokesperson for the entity chaired by Kristalina Georgieva.
Regarding the disbursements of other multilateral organizations, the minister announced yesterday the arrival of new currencies. This is a loan that he signed with the Inter-American Development Bank (IDB) for US$75 million to improve the provision of drinking water services in different locations in the Province of Buenos Aires. Likewise, for today, the signing of a contract with the World Bank (WB) is expected for a disbursement in favor of Argentina. In this case, the contribution will reach US$200 million, sources from the Palacio de Hacienda announced.
Raids
The other response of the Government to the exchange rate tension occurred on the legal level. The FIU and the CNV began raids on the offices of, in principle, a financial company in downtown Buenos Aires. Without giving details, an official source confirmed to Ámbito: “We are carrying out procedures.”
The raided firm would be TPCG Securities Agent. The institution had already been investigated -along with other Alycs- in January in the midst of a CNV investigation for the sharp increase in the volume traded with dollar bonds, before and after Massa’s announcement about the repurchase of foreign debt.
In his Twitter thread, the minister had indicated: “We are going to use the economic Criminal Justice as a vehicle for investigation and clarification of some behaviors and the UIF and the CNV for the analysis of operations related to money laundering.”
Source: Ambito
