It is because the Treasury had to “buy” the Special Drawing Rights and the yuan and for this the BCRA advanced $688,000 million. Likewise, it is expected that, when the disbursement of the Fund arrives, the advance with the Central will be cancelled.
Given the harshness of the negotiations that the government is holding with the technicians of the International Monetary Fund (IMF), the Ministry of Economy had to appeal to the resources available to pay the last due date in June. He had to “buy” Special Drawing Rights (SDRs) and yuan from the Central Bank for US$2.7 billion. And for this, the entity led by Miguel Pesce had to assist with $688,000 million. All that movement cost him exceed the guideline of monetary emission foreseen for the whole year.
According to estimates by the economist Salvador Vitelli, from the Romano Group, the deviation from the issuance guideline forecast for this year is slightly more than $1 trillion, which is added to the other defaults on the accumulation of international reserves. “The issuance goal for the second quarter with the IMF was exceeded by 264%,” the economist said.
So far this year, the Central Bank has transferred a total of $1.35 trillion to the Treasury, while the cumulative goal was originally $375 billion. “The goal for the second quarter was $234,000 million, but in the period it was issued for $1.23 trillion,” Vitelli told Ámbito.
This is an extremely high level of default for the IMF to be able to grant a waiver or pardon to the Argentine government. In fact, it is clear that they are also going to have to configure this objective. The original program, signed in March of last year by Martín Guzmán, indicates that by September the issue should be around $700,000 million, and by the end of the year it would have to be close to $900,000 million. However, in principle, the idea is that, once the disbursement of the Fund arrives (when the agreement that is being negotiated today is sealed), the transitory advance of the Central that was destined to the payment of the maturity is canceled.
The LCG consulting firm estimates that “during June the expansion of the monetary base was entirely due to the financing of the BCRA to the Treasury via the transfer of Transitory Advances ($688,000 million, a large part of which was used to buy foreign currency to pay the debt) and intervention in the secondary market to support the curve of government bonds (approximately $300,000 million)”.
“With this, he accumulates transfers for almost $1.4 trillion so far this year, the equivalent of 0.8% of GDP. This total exceeds by 0.2 points the limit established in the agreement with the IMF for all of 2023”, warned the consultant. LCG points out that, if one takes into account that the agreement with the IMF is practically suspended today, “it must be taken into account that given our income projection and assuming a stable growth of the monetary base, the Treasury would still have a legal margin of $2 trillion, equivalent to 1.2% of GDP, to be financed by the BCRA until the end of the year”.
For his part, the consultant Salvador Di Stéfano indicated that in the last 12 months the monetary issue amounted to $1.5 trillion, although to this must be added the issue that occurs due to the payment of interest from leliq and passes that amount to $7 4 trillion, which are not included in the calculations with the Fund. “It is estimated that the Central Bank issued pesos for the purchase of bonds for an amount of $2 trillion. In total, the sum of the issuance plus interest payments amounts to $10.9 trillion”, estimates Di Stéfano.
Source: Ambito
