Finally, the government managed to leave the Decree of necessity and urgency (DNU)that enables the New agreement with the International Monetary Fund (IMF). Beyond that from its publication the DNU already had the force of law, it was now ratified by Deputies And there is no possibility that the Legislative Power I reject it, since for that it would be necessary for both cameras to oppose. But what does this DNU establish and omit?
The latest updates regarding the agreement were given by the Minister of Economy, Luis Caputowho said that the amount of fresh capital that Argentina would receive “It is defined by the Board of Directors”although the previous week had indicated that “The amount and the program” were defined “.
In addition, the official said “Argentina is a country that can float, as long as they are given the macroeconomic conditions to do so”. And expressly consulted about whether you will keep the “Crawling Peg” of the dollar in 1% monthly, It was not encouraged to answer for the affirmative: “That is part of the agreement and I can’t say it. What I can say is that what we do will not affect people,” he said cultivating secrecy, although he added: “When we release, there will be no devaluation jump.”
According to Caputo, the objective of the agreement is “to sanitize the BCRA“, as well as” to have a healthy currency and continue with the disinflation process “and that” the weights are well supported, for gold, dollars, and not for colored paper that is today in much of the BCRA. ” “There are going to be dollars left over”.
According to official data written in the decree itself, In December 2023, net reserves of the Central Bank were negative at US $ 11,200 million, while as of March 6, 2025 they had increased by US $ 7,034 million. However, this data confirms that, despite the improvement, net reserves still continue in negative field for more than US $ 3,000 million after a year and three months of management.
Regarding the possibility of a free flotation, the official said that “there is no definition.” “One can float as long as it has its healthy economy. Floating means that you have a free exchange rate and that it moves as the market wants. In Argentina that typically went wrong because we always had a deficit “he explained.
According to the IMF: technical data that are known thanks to the DNU
First, it was confirmed that the program will be under the modality of an “Extended Fund Facity (EFF)”, with a duration until 2035. This scheme contemplates the refinancing of the payments planned for the next four years and a grace period of four and a half years before starting the return of the funds.
With this new agreement the debt payment terms are extended, leaving a future administration to comply with the commitments assumed or renegotiate.
It should be noted that An EFF is an IMF program with objectives previously defined by the agency. In most cases, its purpose is to correct imbalances in the balance of countries. On this occasion, the main objective, declared by the Government, is to clean up the Central Bank by cancellation of debts of the National Treasury with the monetary administration and with the own IMP.
What data omits the agreement with the IMF
While Caputo tried to give certainty about the new agreement, he did not succeed. He even appealed again to secrecy and omitted key data. It still remains to know “the magnitude of the agreement and the schedule of disbursements, goals and conditionalities, among other aspects,” he said Gabriel Caamañoeconomist of the consultant Ledesma, in dialogue with scope. In addition, he added that “the most relevant is that it confirms that it will be a Extended Facilities Program (EFF)a long -term agreement with a grace period of four and a half years before starting payments
Beyond the data that met with the DNU, the economist Jorge Neyro It highlights two key points: “One that tells the public sector how to buy non -transferable letters, that is, what criteria use. Use the shortest expiration letters and then in successive order. And then he says that they can also be used to cancel the debt with the IMF in the next four years. In the short term, there is no expiration, but next year and the other yes. That probably implies that somewhere implies that in some part of the agreement will be The background in the future, “he analyzed.
Among the points not specified in the agreement are the total amount of financing, the applicable interest rate, the associated conditions and the macroeconomic goals that will be monitored by the IMF, a usual aspect in this type of programs.
“The text omits tactical details, such as specific goals and the plan to release the stocks, there that would make noise if it is revealed to the market. Surely it will be legally questioned and then whether or not there will be authorization from the part of justice and those legal issues, we do not know, we will see and that is not clear,” he contributed Andrés Reschinianalyst F2 Finance.
The key fact that remains in the inkwell is precisely the amount of the additional funds that the government will have that, according to Caputo, “defines the fund.” Recently, Bank UBS said the agency would provide an additional U $ 8,000 million to the government. Within the report, they point out: “The new funds of the IMF will be key for Argentina to face their debt obligations in the coming years and strengthen the reserves of the Central Bank, which would facilitate a gradual reduction of capital controls later this year. In addition, an agreement could generate additional support from other multilateral organizations (such as the World Bank) and contribute to Argentina to fully recover access to the markets.”
It is important to remember that, In 2022 Argentina received a loan of US $ 44,000 million under an extended facilities program, which used US $ 41,000 million. This capital must be paid between 2026 and 2034. During the mandate of Javier Mileithe government faced payments for US $ 12,000 million in capital and U $ S9,000 in interest. In this context, although these details are omitted in the new program, analysts indicate that the agreement would be better than expected.
Source: Ambito
