BCRA reserves play a relevant role in the delicate macroeconomic balance in force, not only because of their signaling regarding exchange rate sustainability but also because their enlargement currently enables the regulatory entity to participate in the stock market, becoming pesos at a preferential exchange rate. to later finance the treasury, being a certain incentive of the already existing emission. In this way, a break in the trend of reserve growth can not only generate uncertainty about the sustainability of the exchange rate but would also take away from the Treasury an additional source of financing without resorting to issuance, leaving the latter as the only alternative in in the event that tension is generated on reserves, converging in a potential rise in inflationary risk.
In this context, an agreement with the IMF becomes increasingly necessary to make visible, mainly to be able to count on its conditions in such a way that they provide predictability regarding the direction in which the following policies will be developed both from the fiscal, monetary and exchange rates. Only after observing or anticipating these signs will it be possible to dispel the uncertainty that the lack of agreement and the electoral climate combine to make genuine investment decisions in the country. In this way, from the current perspective, The announcement of a deal is likely to have positive effects as it can serve as a sufficient signal for those productive investment decisions that are currently framed by doubt.
Likewise, it is pertinent to highlight in this regard that the bulk of the “on hold” decisions that may exist in the real economy are likely to require not only advertisements but also concrete actions that make the fulfillment of the potential agreement feasible.
Additionally, it would be expected that an agreement with positive financial conditions in terms of terms and rates, gradually open the doors of the international debt market both for the state and for companies, giving rise to greater possibilities of economic reactivation, considering the fact that currently access to private financing is practically nil.
Corporate Finance Manager of Pgk Consultores, member of TGS Global.
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