The Minister of Economy Martín Guzmán will meet this Wednesday with governors of Argentine provinces to publicize the details agreed between the technical teams of the Government and the Fund, at a time when the endorsement of the great powers of the world is sought to try to seal an agreement.
The opposition said it will not attend due to the political nature of the meeting, a position criticized by the government as it seeks to show unity on all fronts before the IMF.
“Within the framework of an agreement with the IMF, economic policy should implement certain turns, such as tracing a path of fiscal consolidation or avoiding deepening the exchange rate delay to protect the reserves” of the central bank (BCRA), estimated the consulting firm Ecolatina.
The market is also waiting for signs of a delayed “multi-year” economic plan in the face of exchange pressure, lack of reserves in the BCRA, annualized inflation above 50% and a complex fiscal deficit.
On New Year’s Eve, the monetary authority published its “2022 Objectives and Plans,” among which the acceleration of the rate of adjustment of the official dollar to the rate of inflation and positive interest rates in real terms stands out.
“Either as its own objective or as part of an agreement with the IMF, 2022 is likely to see a rise in rates,” said Roberto Geretto, an economist at the Fundcorp fund.
Bonds and Country Risk
On Monday, sovereign bonds in dollars closed unevenly on this first day of the year. The most traded security, the AL30 bonar, registered improvements in its prices, but in the rest of the assets there were a majority of falls, which reached up to 4%.
Last year, securities restructured in 2020 suffered drops of up to 20% (AL30D) in hard currency, and 10% on average.
Within this framework, Country Risk rose 28% between January and December. In this round, the benchmark measured by the JP Morgan bank ended at 1,701 basis points, 13 units above last Friday’s close.
Bonds that adjust for inflation extended their rally, especially within the long section of the curve. “The TX26 and DICP climbed between + 1.5 / + 1.8%, leading the increases. To tell the truth, observing both titles yielding CER + 4% and 5.9%, respectively, begins to give vertigo”, they said from Portfolio Personal Inversiones.
Investors await progress in the government’s negotiations with the IMF to solve a debt that is impossible to face in the short term. It is worth noting that in the first quarter the country should pay US $ 4,000 million to said institution and another US $ 2,000 million to the Paris Club, in a context in which net reserves barely exceed US $ 2,000 millions.
Source From: Ambito
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