The Government takes pride in overfulfillment of the goals fiscal and monetary measures agreed with the International Monetary Fund (IMF)following an even stronger adjustment than it had committed to. But the same does not occur with the objective of Accumulation of net international reserves: with only five days left until the end of the third quarter, the Central Bank still needs to accumulate more than US$2 billion.
With the commitment at risk, as he said Scope, in the market They wonder if there will be a waiver request for a possible breach and speculate on the response of the IMF.
The third quarter goals are those that the organization’s staff will audit in the tenth revision of the program, which is initially planned for November. The final disbursement of the Extended Facilities program will depend on it for about US$550 million. The approval of the ninth audit is still pending, whose goals (those of the second quarter of 2024) were met. Although the minister Luis Caputo slipped Last Friday at the Rosario Stock Exchange the possibility of unifying both reviews seeking to access a total of almost US$1.1 billion.
In any case, By September 30, the BCRA should show an accumulation of US$8.7 billion of net reserves (NIR) compared to the level that existed on December 10. According to various private estimates, carried out based on the methodology used by the IMF to measure them and with the latest official data available, would need to add more than US$2 billion. With only five wheels left, reaching the goal seems like a pipe dream.
IMF target and reserves: private estimates
A report from the Economic Studies Department of the Provincial Bank He noted that “the agreement with the IMF has a target stock of -US$2.5 billion by the end of the third quarter” and that, to achieve it, “We would have to add US$2.5 billion in the last ten days of the month to achieve the goal, something that seems very demanding”.
The consultant LCG made a similar calculation: “In the IMF methodology, net reserves are around -US$4.9 billion, accumulating US$6.35 billion since December 7, 2023. Another US$2.35 billion remains to be added in the remainder of the month to meet the goal set for the third quarter of 2024 (US$8.7 billion), which It will be very difficult to achieve unless some significant funding is obtained.”.
Will there be a waiver request for reservations?
There are some factors that could allow the Government to close the gap with respect to the quarterly objective. If the international organizations do not complete all the disbursements scheduled in the programming, they may apply adjusters to slightly reduce the reserve target. In any case, In the market they believe that it is difficult for this to be achieved.
“Consequently, we could be facing the first need for a dispensation (waiver) by the Fund for quantitative criteria not met so far in 2024”he pointed out Provincial Bank in its report. If the IMF decided to grant it, the Government would be able to access the US$550 million of the last disbursement despite the non-compliance.
Since this is the last review (whether combined with the ninth or separate) and the fiscal and monetary commitments have been fulfilled through an over-adjustment, the City sources consulted by this newspaper tend to agree that it would be very strange for the organization to deny these currencies to Milei. Even more so when The real discussion of weight is about the future program: a negotiation that has not yet begun in formal terms and in which the libertarian ecosystem intends to obtain new debt to shore up reserves in the face of a future lifting of the exchange rate restrictions. In Casa Rosada and the Treasury Palace, candles are lit for a victory for Donald Trump in the United States.
“If we have learned anything from the IMF in recent years, it is that ‘a waiver is not denied to anyone’which is why we find it difficult to believe that the disbursement of US$550 million conditional on this review is in danger,” the consultant 1816 in a recent report to its clients.
Note in development-.
Source: Ambito
