In the local exchange, the index S&P Merval by BYMA improved 2.3% to 88,287 units, after accumulating an improvement of 7.5% during the past week.
The negotiations between the officials of the Ministry of Economy and the Central Bank (BCRA), led by Sergio Chodos, the representative for Argentina and the Southern Cone in the organization, which have already begun in Washington, have as counterpart Julie Kozack, deputy director at the Western Hemisphere Department and Luis Cubeddu, head of IMF negotiations with Argentina.
Argentine officials aim to speed up an understanding and not delay the negotiation, in the face of exchange and financial pressures, and the demands of the market and economists to have an agreement with the organization.
However, the director of the IMF, Kristalina Georgieva, stated that “there is still much to do” when referring to a possible agreement for the debt that Argentina has with the organization for USD 44,000 million.
Spokespersons for the Ministry of Economy again emphasized this Monday that these are technical level negotiations, so the possibility of an imminent announcement of an agreement is ruled out.
The points under discussion to reach the agreement fundamentally go through defining the rate of reduction of the fiscal deficit, a plan for the recovery of reserves, the brake on inflation and the reduction of the exchange rate gap.
The Government proposed in the Budget Law 2022 a primary fiscal deficit of 3.3% of GDP, while the IMF seeks to get a commitment to reduce it to 2.5% of GDP.
The official Argentine mission, led by Chodos, is also made up of the Vice Minister of Economy, Fernando Morra; the Secretary of Finance, Raúl Rigo and the Undersecretary of Financing, Ramiro Tosi.
The second vice president of the BCRA, Jorge Carrera and the assistant manager of Investigations, Germán Feldman, participated in the BCRA. Investors were also waiting for the evolution of COVID-19 after the first case of the omicron variant was detected in the southern country in a person from South Africa.
Bonds and country risk
In fixed income, dollar bonds gained up to 3.1%, after accumulating an improvement of 6% on average last week before taking positions while waiting for news in the negotiations with the IMF.
Against this, the Country Risk measured by the JP bank. Morgan, scored its fourth consecutive loss, falling 1.9% to 1,745 units, lows of the last 15 days, after surpassing the psychological level of 1,900 units last Monday.
“After the country risk reached 1900 points, sovereign bonds rebounded, driven by the trip of officials to meet at a technical level with the IMF”, said Roberto Geretto, an economist at Fundcorp.
“It is difficult to know how far the rebound can go, but it is highly unlikely that it will be a turnaround,” he said.
Source From: Ambito
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