As it had been announced that it would happen, this Tuesday, the Government canceled $500,000 million of transitory advances to the Central Bank (BCRA) with funds from the last Treasury debt tender and, in this way, Economy would be paying close to 30% of the resources that the monetary authority gave it to cover expenses.
This, taking into account that so far this year, the BCRA turned to Treasure nearly $1.8 billion Temporary Advances. This is a step anticipated by the Minister of Economy, Sergio Massa, about six days ago, which finally takes place this Tuesday.
As explained by the official, this decision is made “in order to show that the level of order in public accounts will continue to be respected”.
Within the agreement with the IMF
And it is in line with what was agreed with the International Monetary Fund (IMF) during his trip to Washington last week. In fact, when arguing the decision, Massa said that the measure was taken “so that we have peace of mind that the The State is not financed in excess of its expenses with monetary issue, but from genuine financing”.
“This responds to the commitment that Massa assumed that he was going to fulfill a few days ago and took advantage of the fact that he had a very good debt tender to fulfill his promise. He canceled AT with those pesos and this was one of the measures requested by the IMF to make the disbursement“, he evaluated Sebastian MenescaldiEcoGo Economist.
Let’s remember, thatthe international credit organization recently transferred to Argentina US$7.5 billion in advance payments that were scheduled for this year, but, to do so, it imposed some conditions, such as devalue the peso more strongly and put more effort into reserve accumulation and deficit reduction.
A positive step that gives air forward
This is a step in that direction. And Menescaldi anticipated that the good thing is that, if you have a need for weights forward, this step it gives him some air to refinance himself. However, he considered that it is not data that will solve the underlying problems of the economy.
“It was paid $500,000 million with the financing that was obtained in the last debt tender and it is a good figure, but this implies that the Government is expanding its payment obligations with public and private sectors. I think the problem is that current spending must be reduced,” said economist Federico Glustein.
Glustein warns in this regard that there is no spending control so far, which can be translated, according to his vision, into a spiraling of inflation, because he warned that the fiscal deficit remains high.