The government ensures that it is close to closing the negotiations with the International Monetary Fund (IMF)with which Javier Milei seeks to add new indebtedness to underpin the fragile situation of the reserves and contain the dollar At least until the elections.
Although current regulations require that every program with the IMF be approved by a Parliament Law, the Executive announced that it will send a Congress a Decree of necessity and urgency (DNU) To request an guarantee to advance the agreement with the agency, although it will not give details of the content of the program in question.
“The idea of the government is not to delay the approval of the new agreement with the IMF and, on the other hand, avoid a new episode of wear and tear in Congress,” said Wise Capital. “Thus, he announced that he will issue a decree of necessity and urgency (DNU) instead of sending a bill. In this way, It only requires authorization without any technical analysis of its content. It only requires the approval of one of the cameras to get effective, “he explained.
“Exhausted the variables, A new agreement with the IMF seems to be the last letter available to the Government. However, contradictions are not missing here. Historically, the fund policies opposed the exchange schemes and the use of reserves to contain the price of the dollar, “said a cessation’s report (Center for Economic and Social Studies Scalabrini Ortiz).
He added that “also to the exchange rate. Disassembling this scaffolding and/or devaluing to access fresh dollars would mean a pricing reheating, more pronounced falls of income, and a negative effect on elections “.
“An agreement with the IMF is in process, and the government will issue a decree to authorize it, seeking to obtain the implicit approval of Congress by avoiding reviving. The details of the program would not be included and, according to Minister Caputo, they would be signed in April, although recent rumors suggest novelties towards mid -March,” said Max Capital.
He added that “in addition to fiscal goals and net domestic assets, The program will probably include a net reservation floor to avoid excessive currency appreciation and would allow the use of funds under a pre -established scheme. “
“The Government’s intention is to use IMF disbursements to withdraw non -transferable bonds (Intransferible letters or li) held by the Central Bank. Under the revised valuation mechanism introduced in 2024, these bonds are now registered at ‘amortized cost, subject to the recoverable value limit’, which at the time generated a significant loss in the bank’s balance, “said Adcap.
“Applying, for example, US $ 10,000 million of the IMF disbursements, The government could cancel US $20,000 million in LI, thus reducing its gross debt. However, net debt, that is, excluding debt within the public sector, will increase “he explained.
Other key data maintain market attention
“It is discounted that the Government would continue to count independently in its strategy after the important and sustained economic progress achieved in the last year,” said economist Gustavo Ber.
“February inflation was 2.3% monthly and recorded an year -on -year growth of 63.4%“said the Center for Economic Studies of Orlando Ferreres & Associates.
“The Argentine economy had significant achievements in terms of recovery and reduction of inflation, but also presents important challenges regarding the generation and accumulation of reserves And short -term financial stability, “said José María Segura of PWC Argentina.
“The structural reforms faced make a positive panorama in the medium and long term. However, the Short -term challenges can imply a certain degree of volatility that temporarily opaque the achievements achieved, “he said.
“The economy is going through a moment of contrasts. While the slowdown in inflation provides a respite and greater predictability, the appreciation of weight and the growing pressure of external competition generates concern. In this context, Improving competitiveness is key to sustaining growth and avoiding new imbalances “Osvaldo Giordano estimated.
Source: Ambito
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