Over the weekend officials from the Palacio de Hacienda continued negotiating with the technicians of the International Monetary Fund and, according to a high-ranking source from this portfolio to Ambit, “We have made good progress and we believe that we are close to reaching an agreement to recalibrate the program”.
The talks have the deputy minister in the front line gabriel rubinstein and the chief adviser Leonardo Madcurunder the supervision of the Minister Sergio Massa.
The intention of the Argentine authorities is obtain an advance of more than US$10,000 million in the coming months to strengthen the reserves of the Central Bank. aspires to obtain something more than US$ 10,000 million in two tranches with disbursements in June and in September to come. Of this figure, it is being discussed what percentage the Argentine authorities could use to intervene in the exchange market,
The external front was seriously weakened by the impact of “the worst drought in history”, as recognized by the IMF itself. Estimates take the loss of foreign currency from exports to US$20,000 million, although there are more pessimistic calculations that consider that the shortfall could be higher.
In this context, and despite the purchases made by the BCRA in recent days, driven by the “soybean dollar 3”, reserves continue to fall. According to private estimates, the net would be in negative territory, with a shortfall of the order of US$ 1,800 million dollars.
The economic leadership hopes to reach an understanding with the IMF since it considers that the Fund “has no room for the agreement to fall out” -Argentina is, by far, the biggest debtor of the organization-.
Meanwhile, news from Washington indicates that the Fund continues to press for austerity measures. This possibility is limited by the impoverishment that, in general, Argentina has been suffering.
In this regard, the Minimum salary, vital and movil lost 37% of purchasing power compared to 10 years ago, the minimum retirement 24% (even contemplating the current bonds) and the Universal Child Allowance (AUH) 18%, according to Ecolatina estimates.
Another piece of information that illustrates the situation of the meager income of workers, the cost of the total basic basket demands 80% of the registered average salary, according to data from Econometrica, a consultancy directed by economist Ramiro Castiñeira.
In any case, the Argentine economic leadership and the IMF technicians aspire to “Arrange a set of measures that all together allow us to reach December with stability”, Portfolio sources point out.
In parallel, the Palacio de Hacienda team contemplates obtaining other lines of financing for foreign trade. At the end of the month, Minister Massa will travel to China where It plans to renew, and if possible expand, the currency swap in yuan that the country currently has for the equivalent of US$12 billion.
Also on this trip he plans agree to the support of the bank of the BRICs to start using reales in the commercial exchange with Brazil.
Source: Ambito
