He International Monetary Fund (IMF) and the Argentine government agreed, at a technical level, a new financial program for US $20,000 million under extended ease. This amount, which will be disbursed in Special Rights of Giro (DEG), arrives with an explicit purpose: underpin the reserves of the Central Bank (BCRA), today in U $ 24,657 million.
However, sources from the IMF pointed to this journalist that, Until the Board of Directors does not define the approval of the agreement, The amount of the first disbursement will not be known preciselypreliminary estimated by the Minister of Economy, Luis Caputo, in more than U $ 8,000 million. In parallel, an analysis of debt maturities between 2025 and 2028 reveals that the total loan is almost accurately, to which the country must return to the fund in that period.
From there something central can be derived: the IMF conditions to advance with the disbursements will be tied to A series of filters ranging from authorization to convert the DEG into contributors and sounds, to the eventual exchange band that will surely implement, in the facts, a devaluation of start.
How is the IMF package?
The program, valued at approximately 15,037 million DEG (at the current exchange rate of 1 Deg = U $ S1,33), seeks financial obligations in the country in the next four years, a strong evidence arises:
– 2025: DEG 1,420,049,832 (US $ 1,888 million).
– 2026: DEG 2,724,065,254 (US $ 3,623 million).
– 2027: DEG 5,040,310,879 (US $ S6.703 million).
– 2028: DEG 6,383,506,953 (US $ 8,489 million).
The total amounts to DEG 15,567,932,918, equivalent to U $20,705 million. In practical terms, the US $ 20,000 million of the new loan – or 15,037 million DEG – cover with surgical precision the maturgous of the previous program with the IMF, signed in 2018 and refinanced in 2022. In other words, otherwise, The fund lends the country, four years, a sum that replicates what the country is already committed to returning in that periodwithout, in principle, significant margin for other purposes.
What impact can you have on the financial dollar?
This financial design raises questions about its real reach. The BCRA sells to stabilize the exchange market and accumulate a loss of reserves of U $ S1.8 billion since mid -March. Liquid reserves, estimated in U $ 7,111 million After discounting the swap with China and other liabilities, they contrast with dollar lace for US $ 12,133 million, evidencing a structural fragility.
While the entry of Deg will increase gross reserves-potentially au s32,000-33,000 million with the initial disbursement, once defined-,, Its conversion to dollars depends on negotiations with IMF countries, A process that is not always immediate or guaranteed.
The transformation of the DEG into cash, such as usable dollars, is subject to specific conditions established by the IMF. The DEGs are not a legal tender, but a reserve asset that Argentina must exchange with other fund member countries willing to accept them in exchange for liquid currencies.
This mechanism, managed through the DEG department of the IMF, requires that economies with solid reserve positions – such as the United States, Japan or euro zone – participate in the operation, either by voluntary agreements or by designation of the fund in cases of need. In the 2018 program, for example, this process allowed the BCRA to convert Deg into dollars without major obstacles, but the availability of counterparts depends on the global context and the perception of risk over Argentina.
This conversion is not exempt from limitations. The IMF imposes a quarterly limit to the use of Deg – generally 25% of the amount assigned, except exceptions – and the exchange may imply additional costs if the interest rates of the bidder countries exceed that of the DEG (today in 4.5% per year).
In addition, in an international financial tension scenario, the demand for DEG could decrease, delaying liquidity. For the BCRA, which faces constant pressure on the deposits in dollars and the exchange rate, this external dependence adds a degree of uncertainty: The initial amount of disbursement, still pending confirmation, may not be translated into immediate cash if market conditions do not accompany.
Trump’s relevance throughout the scheme
In this context, Argentina will depend largely on the will of the United Statesmain shareholder of the IMF with 16.5% of the votes in the Board of Directors and a decisive influence on the agency’s policies. Since the US dollar constitutes 43.38% of the Deg basket and that the US Treasury is usually a key actor in the conversions of Deg to hard currency, the disposition of Washington will be crucial for the BCRA to transform the 15,037 million DEG in effective liquidity. This dependency is not only technical, but also political: the approval of the program and the ease of access to dollars will depend on the alignment of the government of Javier Milei with the strategic interests of the US, at a time when bilateral relations are under scrutiny after recent diplomatic gestures.
The government argues that this support will allow a transition to a more open economy. However, the US $20,705 million that expire with the IMF until 2028 does not include other obligations: neither the US $ 7,619 million to private holders between 2025 and 2028 nor the payments of the Chinese swap, which will begin to be required since 2026. In addition, the new loan will accrue an approximate interest rate of 4.5% annual in Deg, which will add pressure to public finances in the medium term.
The deposits in dollars of the banking system, which registered a drop of US $ 1,046 million in March, could be stabilized with this external support signal. However, the confidence of the savers will depend on the ability of the BCRA to transform the DEG into effective liquidity, a task that in the past – as during the 2018 program – required the intervention of the IMF and countries like the United States, without the details of these operations being fully transparent.
In short, The agreement with the IMF offers Argentina an instrument to fulfill its immediate commitments with the fund itself, but does not resolve the underlying tensions of its economy. The US $20,000 borrowed at four years matches the US $20,705 million that expire in that period, leaving little space to address other debts or finance a sustained recovery. The success of this strategy will fall on the management of the BCRA and the credibility that the Government can project before the markets and society.
Source: Ambito
