Federico Furiase, director of the Central Bank (BCRA), And one of the most confident men in Minister of Economy, Luis Caputo, He responded firmly when he was consulted if, after the elections, there will be a “reset” of economic policy. “By no means”, He sentenced at the exit of an meeting with insurance companies held on Thursday.
The truth is that, in the market, the expectation is to know if the government will apply a deeper adjustment to the economic plan, if it will advance in a Renegotiation of the current agreement with the IMF and if it will postpone, at least for six months, the originally scheduled return.
All this, even on the stage of a triumph of Freedom advances in national legislatures. In the markets the idea circulates that, if the ruling managed to gather the amount of Banks necessary to guarantee a veto power against possible opposition projects in Congress, It could reach some political armor.
That is to say, Although it is a government that will be weak in parliamentary terms. That whenever it starts from the axiom that problems are only political and that the economic program is impeccable.
Pablo Moldován, director of CP Consultor, told the scope that “the agreement with the IMF planned that by 2026 the government had to go to the markets, and today when you look what is happening with the country risk in some way that seems further and farther. ”
It is worth remembering that for a couple of weeks the country risk began to rise, and closed the week about 900 points.
Moldovan described the official logic as “A very optimistic scenario, based on an overwhelming electoral triumph that would unlock the situation”. However, he warned that, when observing the objective variables -convention, level of net reserves and the exchange program for the remainder of the year- “The panorama is quite complicated.”
“What I see is a very short -term scheme, which is based on patches. However, as the government maintains a solid and consistent narrative, at times that fragility tends to go unnoticed”accurate.
As an example, he recalled that at the end of 2024 the Government reduced the withholdings to guarantee a good liquidation in the first quarter of this year. “The bet was, basically, accumulate currencies in those months and thus be able to return to the markets in the first quarter of 2025, also taking advantage of what remained of the money laundering. But that strategy did not work and, with the seasonality changed, it had no choice but to resort to the background”he explained.
The economist also considered that two months were delayed to agree with the IMF, then breach the accumulation goals of reservations.
“Since laundering appeared, the government has been pedaling with the idea that it will reopen access to markets and resolve the scheme. But the reality is that investors are quite reticent. It is as if there was some respect for the government, which is ultimately the most friendly expression that can be expected today,” pointed out.
Therefore, he warned that after October “A ‘RUIDITO’ probably appears in the relationship with the background,” with the possibility of defining new reservation goals and a different payment schedule. Moldovan also stressed that Argentine debt “It has been working for too long” and that the agency already generates a reset having to contribute its dollars so that the country pays the bonds.
JP Morgan asks that dollars join
Instead, Lucila Barbeito, economic analyst at JP Morgan, He said that Argentina “from the fourth quarter could resume the path of growth and next year to 3%.”
But, for this to become, Barbeito said that, In addition to winning the elections, the Central Bank should initiate a process of accumulation of reservations.
The economist said that foreign investors “not only want to check if the government will have the votes in Congress to consolidate their agenda, are also attentive to the plan to accumulate reservations.”
In that line, he stressed that “the markets positively value what is done by the Executive so far,” although he warned that, once the elections have been exceeded, “it will be key that the Government drives an agenda of reforms in Congress, which would work as a good catalyst.”
Miguel Kiguel: “There is a problem with reservations”
Miguel Kiguel, director of Econviews and former Secretary of Finance, warned that “There is a problem with reservations.” As detailed, “Liquid reserves are around US $ 20,000 million, but of that total, US $ 14,000 million correspond to the loan of the fund. That is, only US $ 6,000 million remains, the equivalent of one month of imports, and with that they have to face the payments of January. It is not a successful situation,” He stressed.
“I think that There is a relationship between the level of reserves and country risk. Investors are hoping that, after the elections, there are retouches on economic policy ”he said.
The former Secretary of Finance said “Argentina should not have difficulty reducing the country risk, since its level of net debt is not high.” However, he clarified that “To produce an indicator’s collapse, the market needs to see that the dollars are effectively in the BCRA box.”
For its part, the IEB Group He recalled that The country risk rose 214 points in the last two months and that the EMBI spread is located at levels similar to those of 2012-2014. “The reserves are today the main market concern, even more than the fiscal result. Only with the envión of the national elections, Argentina could return to a country risk around 500 basic points”They evaluated their analysts.
Source: Ambito
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