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Why Javier Milei talked about a loan of US$ 15,000 million

Why Javier Milei talked about a loan of US$ 15,000 million

Advances the possibility that the country obtains an external credit for 15,000 million dollars to rebuild the ailing reserves of the Central Bank, as indicated to Ambit sources linked to the negotiation between Argentina and the International Monetary Fund (IMF) in Washington.

In this context, the journalistic statements of the president must be interpreted, Javier Milei when asked about When will he lift the trap: “I prefer to play it safe, as they say in the IMF, and target it in the middle of the year. “If they give me 15,000 million dollars, I will open it tomorrow.”. In this way, the head of state ratified his vocation to lift the stocks as soon as possible but with support.

On that occasion, the economist asked the president the reluctance of the multilateral organization to support dollarization. Those who know the privacy of the IMF point out that this alternative “It is not within the Fund’s manuals” and that therefore it would be a high political risk for the current technical leadership of the organization to support this initiative. It should be remembered that more than one senior official of the Fund saw his career frustrated after the failures in the handling of the Argentine case.

However, the IMF is “amazed” due to the forcefulness of the adjustment that Argentina is carrying out, they comment in the capital of the United States. It must be considered that it is not only about reducing the Treasury deficit, about five points of GDP, but also about the same number corresponding to the quasi-fiscal deficit, from which The cut reaches 10% of GDP.

Interest

At a time when the Fund’s policies are being questioned, it is considered that The organization has a particular interest in the success of the Argentine program. Beyond the fact that Argentina is the IMF’s main debtor, a good result would allow it to use the recipe applied in the Government as an example to replicate in other countries.

External support was also discussed by Milei with the Secretary of State of the United States, Antony Blinken, at the end of last month. Diplomatic sources comment that the North American official offered assistance to Argentina and The president asked them to help him lower inflation and that to do so, 15 billion dollars were needed.. Unlike other opportunities, when the US response was negative, they say that the influential official left the door open for the possibility.

Specialists consider that the most direct way to obtain this external support is through the IMF and, if American support were available, the chances of achieving it are high. Furthermore, a factor that could contribute to this aid being able to materialize soon is if the Biden government wants to be the political force that helps Argentina. It is that, in case of winning donald trump In the elections, it is speculated that Milei would have the path more paved.

In any case, a procedure that should be overcome is that it would require a new agreement between Argentina and the Fund (it is not possible to expand the existing credit because the administration of Alberto Fernandez refused to take additional resources).

The point is that, in this case, will require congressional approval. It is worth remembering that Argentina has an agreement 30 months for an amount equivalent to 44,000 million dollars that was approved on March 25, 2022.

Milei and the G7

Meanwhile, in official media, great importance is assigned to the G7 meeting, which will take place in Italy on June 13, in which Milei will participate invited by Prime Minister Giorgia Meloni and where the head of the IMF will be.

In the immediate future, the agreement with the Fund would have some adjustments. After the first measures of the program implemented by Minister Caputo, the agreement with the IMF contemplates, by the end of April, ““the refinement of the monetary policy and operational framework, to ensure that it is well anchored in clear and well-communicated medium-term plans with objectives consistent with price stability”.

Recently, the IMF, through its spokesperson, Julie Kozack, said that it is important to guarantee an increase in social assistance and that the purchasing power of pensions is maintained. This message had already been conveyed by Gopinath to the Argentine Government, along with the need to expand political consensus to the ongoing program. And, as interpreted in Washington, it is the organization’s way of “taking care of itself” in case the program implemented by the Argentine government fails.

Source: Ambito

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