IMF: the Government did not manage to meet the reserve goal but did reach the surplus goal

With today’s day pending in the exchange market, the Central Bank is far from the goal. By the last day of the month, the BCRA is expected to demonstrate that it has accumulated an additional US$8.7 billion to the reserves it had at the time of the change of government.. According to estimates from private sources and calculations by the consulting firm LCG, the gap with respect to the goal could reach up to US$2 billion.

The government is evaluating whether a loan to short-term financing of international banks could provide sufficient foreign exchange to meet the goal at the last minute. It would be a financing agreement between several entities and the BCRA, backed by its bonds in dollars -Bopreal- and gold.

The economic team has not confirmed whether the result of this negotiation is imminent. With a session pending in the exchange market, the Central Bank has not yet reached the latest reserve accumulation goal and is considering options such as a repurchase agreement (repo) with international banks.

In this framework, a two and a half year stage of the Extended Fund Facility (EFF) program closes, during which the IMF provided Argentina with the dollars necessary to meet the maturities of the previous agreement. the Stand By of 2018, given that the country did not have the own funds to face that debt.

Regarding the surplus goal, the accumulated primary surplus Until August it was $8.7 billion, far exceeding the programmed goal. This fiscal surplus, before paying interest on the debt and which is the indicator considered by the IMF, is almost one trillion pesos above the September objective.

What is coming with the IMF

Although there is a goal that the Government did not meet, it is not ruled out that the IMF activates the disbursement considering progress in other areas in addition to a renegotiation of the agreement.

The next phase involves the return of US$45,000 million that the State owes, between 2026 and 2032 where a payment schedule must be established.

Javier Milei’s government is approaching its goals with a scenario that includes the achievement of the December objectives, March and June – although the last one has not yet been made official pending the ninth quarterly technical review – and with a final evaluation pending, mainly on the accumulation of foreign currency by the monetary authority.

In October, without the pressure of enforceable goals, the floodgates of a process that official offices anticipate as much slower and more laborious will open: the negotiation of a new agreement that includes new financing of the organizationto reinforce the Central’s coffers. And there is still the possibility of unifying the ninth and tenth technical reviews.