The direction is not clear: it may be a neoconvertibility, fueled by the liquidation of silver savings, which Wall Street labels as “synthetic.” Or perhaps, dollarization.
Dollar and exchange anchor. Salary anchor. And also fiscal anchor, even if it hurts the governors and has everyone else baffled. He is the whip of the Austrian monarch and his assistant, the minister, dedicated 24-7 to cleaning up the liabilities of the Central Bank. The direction is not clear: it may be a neoconvertibility, fueled by the liquidation of silver savings, which Wall Street labels as “synthetic.”
Or perhaps, dollarization. Meanwhile, freedom advances, but The Government insists on intervening where it can: The free market is not useful for accumulating reserves by paying cheap dollars or for achieving surpluses by dint of cuts in pensions and transfers to the provinces. Nor to limit salary agreements –Caputo already put a limit of 9% in the April joint agreements and lowered the order in the Ministry of Labor not to approve a higher figure.
There is no money in the IMF: there will be a lack of dollars
But something stinks in Denmark. The IMF is not enough. On the one handwants the dollar to float although managed by the BCRA. On the other hand, it seems not to be enough with the adjustments deployed by the Argentine government. And he even gives himself the pleasure of planting the seeds of discord, sending it to the Treasury Palace on the left, saying that “the quality” of the adjustment must be improved. Then, the worst of revenge occurs, the most unusual: The Fund, Argentina’s main creditor, seems determined to comply with its statute, something it did not do with former president Mauricio Macri. In fact, it means that the pending US$5 billion (let alone US$15,000M) will not be made without some additional reforms at the exchange level: devalue, lift the stocks and maintain the positive interest rate in real terms. The thing is that the organization, by statute, is prohibited from transferring resources without guaranteeing changes that promote improvements in the balance of payments. Said in Creole: you cannot lend so that reserves are lost again. Making the dollar more expensive appears to be the appropriate recipe. The field also asks for it, which must liquidate the thick harvest. But the Government prefers that inflation remains high due to the removal of subsidies, instead of generating it due to another devaluation, it is a matter of priorities.
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One a week. The DNU, Congress and the adjustment
The IMF’s refusal is repeated every week. Curious. As if he wanted to make it clear that the plan in progress is not his. As if he were afraid. He said in the last hours that he was “enthusiastic” about the adjustment, but asked for “sustainability” of the plan.. That there is no danger of social outbreak. And to that end, it pushes the Government to reach an agreement with governors that will allow DNU 70 to be safeguarded and even achieve the lifeline of the omnibus law. That’s what Georgieva wants. The fiscal chapter, improve the adjustment via tax revenues. And the retirement formula established by the new DNU. Even just a few days ago, Rodrigo Valdés, director of the agency’s Department, maintained that “it is still premature to discuss the precise modalities of the program” with Argentina and warned that “it is necessary to improve the quality of the fiscal adjustment, not the quantity.”
With the United States at full capacity, thinking about the IMF
The Government is restless. President Milei strives to ingratiate himself with the United States at all levels -yesterday in Ushuaia with General Richardson-, because he needs the help of the Treasury Secretariat -and the State Secretariat- in the IMF. The Treasury Palace thinks that in the coming weeks it will be able to unlock part of that situation. Caputo himself is already packing his bags to travel to Washington. It will be seen with Georgieva & Co. in the context of the Spring Meeting (corresponding to the Northern Hemisphere), on April 17, 18 and 19. That meeting will serve to organize what is to come. During April alone, Argentina will have to pay the Fund about US$2.8 billion. That will put pressure on reserves. But the Government does not want to devalue.
Source: Ambito
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