Official dollar
Although the Fund avoided talking about exchange rate delay despite the fall in the Multilateral Real Exchange Rate (TCRM) post devaluation, it recommended having greater exchange flexibility and pointed out the need to maintain the accumulation of reserves and encourage exporters to continue liquidating.
The Fund also released a graph showing the evolution of the official dollar post devaluation, but also the behavior of the real exchange rate. There you can see the sharp drop in this last post-devaluation, but without returning to the levels prior to last December.
Dollar blend
The economic team came out this Monday to rule out an imminent change in the exporting dollar, after the report of the staff of the International Monetary Fund implied that the dollar blend It had an expiration date at the end of June.
“Following initial steps to undo currency restrictions and controls, the authorities remain committed to undoing all capital controls and currency restrictions, starting with the most distorting measures, including the removal of the 80:20 preferential export scheme and remove the COUNTRY tax before the end of 2024,” the Monetary Fund’s technical team mentioned among the upcoming measures it expects from the Executive Branch.
In recent weeks, versions of modifications to the “blend” dollar have circulated (80% at the official exchange rate, 20% in cash with liqui), so that a change in the formula would make the exchange rate more advantageous and That would push the liquidation of currencies. Last week the Minister of Economy Luis Caputo considered “unfounded” to those rumors and confirmed that there will be no devaluation, that the scheme of 2% monthly devaluation of the official exchange rate will not be touched and that the exporting dollar would continue in force.
Taxes
In the last report, the Fund also suggested the reduction of dependency on distortive taxes such as those that are charged on the volume of business (Gross Income) in advance, in view of the draft of the tax reform that the Government will present in September.
Credit
In his staff report released yesterday, the International Monetary Fund assured that the Government is preparing progress in the framework regulatory of the financial system oriented to “guarantee a level playing field” between fintech and traditional banks, with the aim of establishing an environment of greater competition between the different market players that allows raising financing levels for companies and families. According to BCRA data, Credit to the private sector in Argentina represents 4.1% of GDP, one of the lowest levels in the region.
Tax adjustment
After approval of the review, the IMF He confirmed that the program remains “firmly on track” but called for improving the “quality of fiscal adjustment, taking the first steps towards an improved monetary and exchange policy framework, and applying reforms to unlock growth, formal employment and investment.”
“The Board emphasized that to maintain solid progress, it is necessary to improve the quality of fiscal adjustment, initiate steps towards an improved monetary and exchange policy framework, and implement the structural agenda. It will also be necessary to continue efforts to support the most vulnerableexpand political support and guarantee agility in policy formulation,” they stated.
Finally, the organization considered that “it will also be necessary to continue efforts to support the most vulnerable, expand political support and guarantee agility in policy formulation”.
Source: Ambito
