One by one, the measures announced by Sergio Massa
1- Deficit and austerity
- Massa ratified that “we are going to meet the goal of 2.5% of the deficit. We are going to make all the necessary corrections”, at the IMF.
- He also recalled that “the freezing of the national State plant governs, but in addition each jurisdiction will be responsible for the decentralized companies that will also be affected by this limitation. They must submit a sworn statement month by month of the status of their plant.
2- No emission.
- “I instructed the Secretary of the Treasury not to use the balance of advances from the Treasury for the remainder of the year. Likewise, on Monday a refund will be made to the BCRA for $10,000 million, a cancellation path that we will try to continue.”
- “We are going to manage with our resources and financing from the private sector.”
3- Rate segmentation
- “Almost four million Argentine households did not request to maintain the subsidy and that is a first cut. Among the 9 million who did apply for the subsidy, we are going to promote consumption savings.”
- “In light we are going to subsidize up to 400kw, reaching 80% of users but only 50% of total residential consumption. In the case of gas, the removal of subsidies will follow the same logic, but respecting the seasonality of the different regions of the country”.
4 – Trade surplus
- New regimens. “We are going to promote and defend every dollar of every Argentine (…). We are going to promote by DNU regimes for agribusiness, mining, hydrocarbons for increased production and knowledge economy, with benefits.”
- Complaints of triangulation of underinvoicing of exports and overinvoicing of imports. “We are going to denounce cases of underinvoicing of exports and overinvoicing of imports before the Argentine justice system and the anti-money laundering unit of the United States.” A registry will be opened for 60 days for companies to rectify their position before Customs. There are more than 13 thousand operations of 722 companies that are being targeted.
- Promotion of export financing. “We will launch a credit program at promotional rates, and a guarantee scheme for leading exporters. We want to sell more Argentine work to the world”
- Traceability of Foreign Trade. “We will implement a foreign trade traceability system for greater control and transparency in the use of foreign currency for imports.”
5 – No devaluation shock
With that statement, he cleared up – from the words, at least – the uncertainty about what type of exchange policy the Government would adopt under the management of Massa with dominance in the economic area.
6 – BCRA reserves
Massa announced agreements to advance exports for US$5 billion from value chains in fishing, agriculture and mining in the next 60 days, which will go on to increase the BCRA’s reserves.
In addition, he anticipated that pending and new disbursements will arrive from international organizations for US$1.2 billion, including a new one from CAF for an additional US$750 million.
And finally, it confirmed that it will negotiate in three weeks four REPO offers to strengthen reserves and repurchase sovereign debt: three from international financial institutions and one sovereign fund.
7 – Voluntary debt swap
To try to clear up uncertainty around a hypothetical re-profiling of debt, it announced “a voluntary swap for maturities in pesos for the next 90 days, which will end on Tuesday, for which we already have adherence commitments of more than 60%”, announced . Most of the holders are likely to be public bodies.
Source: Ambito
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