Complying with the debt, reinforce the reserves, and lift the exchange rate are the main issues marked by the economist.
The chief economist of the Latin American Economic Research Foundation (Fiel), Daniel Artana, He defended the signing of a new agreement with the International Monetary Fund (IMF) and considered that discussing the details of the program in Congress “is a delirium.” In his analysis, he explained the reasons why the Government considers this understanding essential and advanced what could happen with the exchange rate.
Javier Milei executive formalized Tuesday, through a decree of necessity and urgency (DNU), a new program of extended facilities with the IMF. The decision allows to advance without the need for legislative approval, something that generated strong criticism from the opposition. The president argued that the objective of the agreement is to cancel part of the debt that the Treasury maintains with the Central Bank and facing maturities with the international body within the framework of the program signed in 2022.
Despite what the law marks, for the economist the parliamentary debate on the details of the agreement is not only unnecessary, but could generate distortions in the financial market. “I understand that it has some logic that has to authorize indebtedness with the fund, although Congress authorizes debt in all budgets. Going to Congress to validate the agreement and debt is one thing, but discussing details of the agreement as some legislators intend is a delirium,” he said.
The three reasons why it is “vital” to sign the agreement, according to Artana
During the interview with Radio Rivadavia., Artana highlighted three fundamental reasons why the agreement with the IMF is key to the Argentine economy:
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Comply with debt matches: The economist recalled that the government of Alberto Fernández postponed maturities of the program signed in 2018, which currently impacts. “From here to 2027 we have maturities with the fund for 13,000 million dollars and also maturities of private debt that are even more relevant. An agreement with the fund is needed even when it is to kick maturities,” he explained.
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Reinforce the reserves of the Central Bank: For Artana, accessing additional financing is key because net reserves continue in negative terrain. “It seems that one can live without the bottom, but no. Previous years there was an entire exercise of postponing debt payments that a dead man left this management,” he said.
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Advance in the removal of the exchange rate: The economist indicated that the IMF Staff considers that the Blend dollar and current exchange exchange are “anomalies.” In this regard, he anticipated that the agreement will include a schedule for the elimination of these measures. “The government says that next year we will not have stocks, so one assumes that the agreement foresees a gradual disarmament of all this, or there, I don’t know, but this will fly,” he said.
Regarding the possibility of using IMF disbursements to intervene in the exchange rate, Artana stressed that the international organism is usually reluctant to allow such maneuvers.
However, he said that the Government will have “an additional capacity for market intervention” in case of payment balance crisis. “They already told us that this parity is not equilibrium, but they give you reservations to intervene at the time of crisis, when you have adverse external circumstances,” he concluded.
Source: Ambito
