The financing granted by the International Monetary Fund will be a “considerable” amount and conversations for a new program are “very advanced”he said Julie Kozack Multilateral agency spokeswoman in the framework of a press conference held on Thursday in Washington.
The official did not specify the figure of 20,000 million dollars that the country requested to the agency, as announced this morning by the Minister of Economy, Luis Caputobut said that He could advance that the magnitude of this assistance will be “considerable.” “The conversations continue and I will not go into details, I can simply confirm that the final package (assistance) size for Argentina will be determined by our executive directory and that the conversations focus on a considerable financing package.”
Nor did the official anticipate when the board meeting would be held to deal with the Argentine case. It is ruled out in this week and the next planned meetings are March 31 when article IV of Greece and Sweden will be discussed and on April 4 it is planned to carry out a “Evaluation of the stability of the financial system” of China.
IMF praise to the Argentine program
Kozack began his exhibition on Argentina by praising the program carried out by the Government: the country faced “A really impressive stabilization programHe said that inflation has dropped thanks to a great fiscal consolidation and the sanitation of the Central Bank’s balance sheet.
He added that these resolutions have been complemented with deregulation measures, market reforms and the elimination of distortions and some controls.
He affirmed that “the reforms are beginning to keep fruits. Despite the macroeconomic adjustment, economic activity is recovering strongly, real wages are increasing and poverty is descending. This rest in poverty also reflects, of course, a significant increase in social assistance to vulnerable groups.”
Regarding conversations aimed at implementing a new extended facilities program, he said “Progress is significant”. Recalled that they have remained “Intense and productive discussions. And those discussions include meetings in Person in Buenos Aires and also here in Washington, DC “
On the specific policies of the new agreement, it was limited to pointing out that “to sustain the profits that have been achieved so far by the authorities (Argentines) There is a shared recognition of the need to continue adopting a consistent set of fiscal, monetary and exchange policies while we support and advance the reforms for growth ”.
In relation to funds of funds, Kozack said that “As in all programs, disbursements will come in sections throughout the life of the program. But the exact phases and the size of each section is also part of the conversations that are being maintained. ”
Advances in negotiations with the IMF
The spokeswoman’s statements were known after in the morning it was confirmed that Argentina requested a loan of 20,000 million dollars to the multilateral bodyaccording to the Minister of Economy, Luis Caputo. This assistance could be complemented by the contributions of other credit agencies such as the World Bank that, as I can transcended, could grant loans for about 6,000 million dollars.
In this regard, the head of the Palace of Finance said “we are also negotiating with the World Bank, IDB and CAF, an additional package also of free availability, always to reinforce the reserves of the Central Bank”,
The decision to announce the amount of requested support from the Board of Directors was taken after the head of the Palace of Finance discussed with the IMF managing director, Kristalina Giorgieva in what is interpreted as an attempt to calm the tension that has been registered in the exchange markets.
“The level of support that we are going to have in a few days on the liabilities of the Central Bank have never had even convertibility, ” Caputo explained.
He added that “When you see gross reserves today and add what is coming, the number will rise to 50 billion dollars at the end of the talk.”
At all times the minister tried to bring a message of tranquility to the markets. In this regard, he said “It is important to put all this in perspective. Some talked about a devaluation of 30% or even more, but those rumors have no foundation. ”
From this point of view he denounced that “It is clear that there is an intention to destabilize the government. From the minute one there was an effort of some sectors to create chaos ”
In this sense, Caputo insisted:“Sometimes I listen to a journalist or read in the newspapers of the ‘exchange run’, the ‘crisis’ and others. Well, I am surprised. Then, I say, you have to put it in perspective. The same ones that militate this four years ago received an exchange rate at $ 60 and ten months was worth $ 180. In ten months I had uploaded 200%. The same people who assumed when the exchange rate would immediate Some said $ 8000, which at today’s prices would be about $ 4000, $ 6000, $ 16,000.
Expectations Towards the future
LIVING FINANCE MARKETS ACTIONS BAGS INVESTMENTS
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Kozack’s statements were expected with singular expectation in the markets from Doubts that operators were raised about the continuity of the exchange scheme. Days ago the journalistic statements of the Minister of Economy generated uncertainty, Luis Caputowhen it did not ratify the continuity of the Crawling PEG scheme.
In the midst of rumors about a possible IMF requirement to make exchange adjustments in exchange for sealing a new agreement for the debt, disarmament operations of “Carry Trade” strategies were recorded. Thus, on Wednesday the alternative dollars exceeded the barrier of the 1,300 pesos, a level that was not reached since last September and the Central Bank had to intervene selling about 1.3 billion dollars in the last seven days to contain the gap between the official exchange rate and the financial.
Source: Ambito
