The International Monetary Fund (IMF) and Argentina are “fully committed” to a new program, the IMF said on Friday, although more talks are needed following recent technical meetings between the two sides in Washington.
Meanwhile, a speech by Vice President Cristina Fernández in which she showed her opposition to an agreement under the normal conditions of the body once again put a blanket of uncertainty in the financial market.
“Thus, these facts demonstrate the difficulties in reaching an agreement that is economically and politically viable, where timing also matters because it cannot take too long, given the low level of reserves and payments to be made to the agency,” said Roberto Geretto, an economist at Fundcorp.
“This undoubtedly takes the momentum off the rally in dollar bonds seen last week,” he said.
On the other hand, The IMF board deals this Monday within the framework of the “Interim review of the adequacy of the precautionary balances of the Fund”, its policy of surcharges, which consists of charging an interest rate in addition to the one that exists on loans that exceed the quota , something that Argentina has been demanding for a long time.
In addition to the IMF, investors are also awaiting the presentation to Congress of the 2022 budget and a delayed ‘multi-year’ economic plan amid exchange pressure, high inflation and high fiscal deficits.
The Minister of Economy, Martín Guzmán, will attend the Chamber of Deputies to present the 2022 Budget bill, which contemplates a growth of 4% and derive most of its resources to public works and economic growth.
Guzmán, along with his economic team, will attend after 1:00 p.m. to present before the Budget Committee on the central aspects of the project and the changes that will be introduced in the items established in the initiative sent on September 15, as established by Law of Financial Administration.
The project turned by the Government foresees a growth of 4% of the Gross Domestic Product (GDP), an inflation of 33% and a dollar to $ 131.1; and it contemplates a real increase in social spending and a reduction in energy subsidies.
The Argentina’s sovereign bonds operated with significant drops this Monday, while country risk soared, due to renewed doubts about an early agreement between the country and the International Monetary Fund (IMF) for a millionaire debt.
In the local OTC market, sovereign bonds lost an average of 1.1%, where the benchmark ‘Bonar30’ collapsed 2%.
For its part, the country risk prepared by the JP Morgan bank rose 42 units to 1,755 basis points after local noon, compared to a minimum level of 1,083 points registered on September 10, 2020 after a millionaire debt swap and exceeding 1,900 points at the end of November.
Source From: Ambito
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