The government of Javier Milei Last the details of a new agreement with the International Monetary Fund (IMF)a decisive step to consolidate a financial barrier –A “Wall” of dollars – containing exchange pressures before the October legislative elections.
The central fact is that this wall has, for the government, an asymmetric form, a greater disbursement dimension at the startnow, very soon, an end in the least pretentious time. That is, the minister Luis Caputo He wants them to advance the funds that, supposedly, must use for the repayment to the IMF itself. The money is fungible, it is known, and IMF DEGs can be mimicked in the maelstrom of reserves of the BCRA.
The meeting that the IMF does not confirm but the government points
The main guidelines of the program – total motion, interest rate and exchange scheme – say in the Casa Rosada, are defined, although Remains precision on the initial disbursementkey to stabilize the reserves of the Central Bank and avoid an escalation of the parallel dollar. In the Government they point out that, at this time, the IMF Staff informally analyzes the Argentine case, although the meeting does not appear in its public calendar, an indication of the urgency that the government prints to the negotiations. Scope today contacted official sources of the agency who said they had no information from that meeting.
The understanding, framed in an extended facilities program (EFF), contemplates an estimated loan Between US $ 10,000 YU $ 20,000 millionwith a rate of 5.63% – inferior to 6.46% of the previous agreement – and a grace period of four and a half years. The formal objective is to rebuild the coffers of the Central Bank, which closed 2024 with negative net reserves for US $ 6,200 million, and honor commitments to the fund itself, whose capital expiration amounts to AU $ S4.5 billion this year. However, the real focus is in the “wall”: A robust initial disbursement that allows deactivating the 1% monthly crawling, to retrace the liquidation of the Blend dollar and travel towards a flexibility of the exchange rate without unleashing a run.
The encounter between Scott Besent and Luis Caputo is declassified
Transcendentes come at this time in the figure of Scott Besent, Secretary of the United States Treasury, who, according to the sources consulted, would have recommended Minister Luis Caputo Accelerate adjustments in the financial and economic programand do it now, in order to unlock this key IMF disbursement before the exchange tensions are aggravated.
The situation is pressing. In the last two weeks, The Central Bank sacrificed more than US $ 1,200 million To keep the parallel dollar at bay, which touches the $ 1,300, while the gap with the officer exceeds 20%. With seven -month legislative elections, the Executive requires an immediate injection of foreign exchange to gain margin of maneuver. The strategy includes advancing modifications in exchange policy, seeking to avoid a turbulent economy and a higher inflation pressure in the previous electoral, in an internal and external context that carefully observes the government’s performance. President Milei anticipated that the official announcement could be completed in mid -April, although the IMF keeps caution: this week’s informal review precedes a definitive vote still without scheduleleaving the market in a waiting compass that could extend up to 20 days.
The agreement also has external and domestic implications. In the international arena, the government is confident in the support of the United States, which controls 16.5% of the votes in the IMF directory and has the implicit endorsement of the G7. While Minister Luis Caputo ruled out immediate trips to Washington, Ambassador Gerardo Werthein intensifies contacts to ensure political supporta management that takes relevance after Besent’s recommendations.
For markets, the size of the “wall” will be decisive. Analysts of JP Morgan and Bank of America observe a virtual rebound in the ADR Argentinos, with 5% increases in the last days, But they warn that a lower initial disburse. The risk that the social situation also aggravates as a factor that could complicate governance, beyond the financial situation. In short, the success of Milei’s economic plan depends on this liquidity barrier: if it is solid, it will grant stability until October; If it is insufficient, exchange tensions could precipitate a crisis of magnitude. Strictly speaking, the walls not only delimit: sometimes, they are the last line of defense against uncertainty.
What is the theoretical package of the IMF of US $ 20,000 million
The financial package with the IMF would reach US $20 billion, combining fresh money and refinancing under a scheme that includes something similar to the “Brady 2.0” plan. This Restructure Plan signed in 2022, returning to the government approximately US $ 4,000 million in free availability funds –Equivalentes to 3,100 million special turn rights (DEG) paid in the last year – to strengthen the reserves of the Central Bank without increasing the total debt with the agency.
To this They would be added between US $ 1,658 and US $ 4,658 million Additional fresh money, carrying the initial disbursement to a range of US $ 5,000 au S8,000 million, destined to underpin the transition to a unified exchange rate and eliminate the exchange rate. The rest, about US $1,000 million, would be used to refinance expirations planned between 2026 and 2029, under the rate of 5.63%.
Source: Ambito
