The government would have received green light by the International Monetary Fund (IMF) so that a part of the next extraordinary disbursement that the creditor will grant can use the Central Bank and the Treasury to intervene in the foreign exchange and capital market with the aim of containing the currency gap and avoid a possible devaluation.
In the last days, progress was made in negotiations with Fund, according to sources from the Palacio de Hacienda to Ámbito. The official intention is that before the end of the month an agreement is reached to recalibrate the current program. To close it, the minister Sergio Massa would travel to Washington in the next few days.
Now it would be negotiating What amount would Economy have? to operate in the market. This is a point under debate, it is key for the Government because it is expected that, in the current scenario of rscarce reserves in the Central and political uncertainty by PASSEDIt is sought to be avoided at all costs. tense moments exchange rates that end up aggravating the social and economic situation.
On this occasion, the approval of the Fund comes from the income of fresh dollars hand in hand with a possible advance to face maturities with the bank of last resort, which allows the management of the front of all offset fiscal losses caused by the drought.
It should be remembered that in 2018 and 2019, the authorization of the Fund to intervene in the market during the Administration of Mauricio Macri brought various situations of lack of control and exchange stress which ended up deriving in large losses of reserves.
rewrite the deal
In summary, the Argentine government seeks the support of the IMF to face the current situation, characterized by failure to meet targets due to the impact of the drought on foreign exchange and tax collection. In addition, the breach of the agreement is highlighted by Massa using reserves to intervene in the latest currency crisis.
The support of the IMF is based mainly on the political will of the administration of Joe Biden to avoid a major crisis in Argentina. Despite the China-related announcements, as the swap extension and new disbursements, these will not have a relevant short-term impact on the electoral process.
The situation is complicated by the combination of the extreme weather situation and the maturities that the State must face this year. Unlike in 2022, when IMF disbursements exceeded payments, now the situation is reversed, making it difficult to meet future obligations.
The head of the Palacio de Hacienda seeks the IMF to approve the cancellation of the goals due to the drought and advance the disbursements agreed for the rest of the year, lending a hand in the midst of the emergency. Besidesextending the payment terms is being studied to guarantee sufficient funds and strengthen reserves. IMF support for these measures would be a significant sign support for the current government.
Source: Ambito
