JP Morgan and Morgan Stanley watched the IMF’s support for the Argentine government, but highlighted some key problems to solve.
JP Morgan (JPM) and Morgan Stanley (MS), two of the most important financial signatures of Wall Streetthey published reports in which they analyze the Situation of Argentina After the recent one Backup of the International Monetary Fund (IMF). They agree that it is a key step to consolidate the government’s economic program despite persistent challenges.
What JP Morgan said about Argentina and the IMF
First, JPM highlighted the approval of the first review of the Program by the IMF, which enabled a disbursement of US $ 2,000 million and stressed that the agency “emphasized that strict monetary conditions must continue to support the disinflation and the ongoing re-monnetization process”
In addition, the bank warned about recent exchange volatility, with a depreciation of 14% of the peso in July, but valued that the transfer at prices, until that month, was limited: “The fourth week of July showed almost no variation in food, with the Food CPI in 1.5% monthly and the general by 1.8%.”
Regarding external accounts, he stressed that “the balance of payments based on Caja registered in June a surplus after 12 months in red” thanks to the export jump prior to the increase in retentions and greater energy sales.
However, it projects that In July, the current export rhythm and debt payments would return. Despite this, economists estimate that “financial income will avoid a drop in gross reserves” and anticipate that they could increase by US $ 5,000 million towards the end of the year if the trend is maintained.
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Morgan Stanley’s analysis
For his part, MS stressed that the first review of the IMF “shows strong support for the current combination of policies” and celebrated that “the fiscal objectives, the key pillar of the stabilization plan, have been met”
However, he pointed out that Argentina needed a dispensation for not reaching the reservations goalalthough the IMF recognized recent efforts, including “the issuance of US $ 2,000 million in Repo, US $ 1.5 billion in Bontes and Treasury purchases.”
The bank considered positive that the IMF has flexible the intermediate goals of accumulation of reserves “to give time to meet in this matter”, although the final objectives of 2027 are maintained.
In addition, he highlighted the organism’s recommendation that the BCRA “implements a predictable purchase scheme of dollars, such as other central banks in the region, to strengthen the program.”
The specialists in charge of the report concluded that “while Argentina remains committed to the fiscal balance, there is a broad support for the country”, but warned about the importance of “being aware of the policy sequence” to sustain stability and take advantage of an eventual “virtuous circle” of minor mines and greater access to markets.
Source: Ambito
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