The economist questioned the government’s delay and asked for a new “more forceful” understanding with the international body
The economist Luis Secco launched a strong warning to the government of Javier Milei in relation to the recent technical agreement reached with the International Monetary Fund (IMF), which includes a disbursement of up to US $20,000 million in the next 48 months. According to the analyst, The understanding could be insufficient to face the country’s economic situation, and considered that it will be necessary to renegotiate it urgently.
“The agreed amount is not enough for you. If there is no new renegotiation, which for now seems unlikely, I worry me,” said Secco in a recent interview, in which he also questioned the executive’s times: “There was a delay that today puts you in a complicated situation,” he said.
Secco asks for more funds and a different exchange rate regime
For Secco, the Milei administration should advance a new scheme that contemplates not only greater exchange flexibility, but also an extension of the funds provided by the IMF. “You need a more forceful agreement, with more fresh funds and a different exchange rate regime. But the fund is not willing to give us reservations that we are going to give away”held.
In that sense, he recalled that the IMF had already been claiming the lifting of the stocks and greater liberalization of the change market. Therefore, he considered that the government must demonstrate that it has a clear exchange policy, operational tools and a central bank with intervention capacity.
“The fixed exchange rate limits a lot to BCRA. On the other hand, a floating exchange rate gives you a stabilizing mattress, ”he explained. In addition, he said that in front of external shocks such as those that the commercial policy of US President Donald Trump could generate,“ floating regimes help you a lot ”.
Criticism of government communication and warning for reservations
The specialist also pointed against the official strategy in the midst of negotiation with the fund. “The Government spent a bullet when the amount of US $20,000 million was repeatedly announcing. The DNU was sent to Congress, and market impatience is a fact,” he evaluated.
Finally, Secco remarked that international reserves remain at critical levels: “Today you get accounts and are almost as negative as when Milei assumed. I am worried about the passivity of the government. The IMF needs an agreement with Argentina as much as Argentina needs it, but you have to find a middle point,” he concluded.
Source: Ambito
