“Argentina now wants more time to pay and wants to reach an agreement, which is necessary for both parties,” said the Minister of Economy, Martin Guzman, in a recent interview.
The country risk of the third largest economy in Latin America is around historical maximum levels, which reflect the doubts and risk aversion of investors. On Friday it was 1,919 units.
“On Friday 700 million (dollars) are due with the IMF, where many analysts wonder if there will be payment or already default before March. It is most likely that it will be paid, given that most of it will be produced with the SDRs that the same IMF distributed last year, and it is also not an amount that implies a large saving of reserves in case of non-payment”, estimated Roberto Geretto, from Fundcorp.
“On the contrary, not paying would make negotiations more difficult and bring more nervousness to the market. Thus, between paying or not, the balance is tilted towards paying, as long as rationality prevails,” he estimated.
“We suspect that the government will reach a new agreement with the IMF this year, possibly in the first quarter, and take tentative steps towards more market-friendly policies. Even then, we would have doubts about the sustainability of Argentina’s public debt in the medium term. “Capital Economics said.
“With a view to this year, the outlook for foreign trade is becoming increasingly challenging in the context of an international context that is less favorable than expected for 2022”, estimated ABECEB.
He added that “2022 would not be as encouraging a year as 2021 for our exports, which would fall 4% to 74,818 million dollars, a worrying news given the growth of 5.1% expected for imports, which would be equivalent to 66,407 million by the end of this year.
“The stocks (for agriculture) implies an exchange withholding for all those who export, which is the difference between what the producer receives at the wholesale exchange rate of the Central Bank and what it would cost him to repurchase that same amount of foreign currency in the parallel market. Today that retention is close to half of the value exported,” said Aldo Abram, of the Fundación Libertad y Progreso.
“In recent days, financial exchange rates adjusted their price to the current uncertainty about the agreement with the IMF in a context of seasonal fall in money demand,” said Delphos Investment.
“The severe drought and high temperatures deteriorated the prospects for the thick crop, subtracting approximately 3.7 billion dollars in exports from our ‘baseline’ scenario,” he estimated.
“The interest rate/devaluation rate differential will be a key variable to monitor in this context of scarcity of reserves, which may be further aggravated by the drought,” Portfolio Personal Inversiones estimated.
“The successive sales of the last wheels continue to accentuate concerns about the dynamics of net liquid reserves, especially considering the greater supply of the field and the next financial commitments. Thus, the upward rearrangement of financial and free dollars is accelerating, since that the lack of signs of progress in the negotiations with the IMF does nothing more than incline operators more and more towards hedging”, said Gustavo Ber, from Ber Consulting.
“The focus will continue on the details of the negotiations with the IMF, while activity data will be released on Tuesday and Wednesday. On Tuesday, the EMAE for November will be published, while on Wednesday it will be the turn of sales in supermarkets and malls, both corresponding to November,” said a Balanz report.
Source From: Ambito
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