The Dollars not listed. The Government is seeking US$15 billion. Consider that this is the minimum figure necessary to avoid taking risks when lifting the stocks. However, it is likely that even that figure is not correct. Here and there Commercial debt accumulates with importers as a counterpart to the dollars that the Central Bank supposedly manages to save.. The same goes for informal commitments that the BCRA has taken with those companies and entities that want to transfer dividends abroad. There is a waiting list.
If the dollars do not appear, it is because the IMF has not given approval for a disbursement. It is estimated that there are at least US$5,000 million that were pending – already approved – from the first months of the mandate of Alberto Fernandez.
The former president had asked the IMF that he did not want to receive that disbursement so as not to continue increasing the debt with the organization. For him Minister Luis Caputoit is those same resources that should now be susceptible to being transferred to the country by Georgieva. In it IMF they think differently.
Let’s say the dollars are coming, shhh
In recent days the Government has launched a campaign. He tells his spokespersons that the injection of dollars is imminent. Even the president himself is in charge of spreading it. It is assumed that, apart from the IMF, there are investment funds that could bring in an additional $5 billion. To this would be added the same number of large companies active in the country that should release investments. Also from friendly countries that could bring in millions.
But reality weaves another plot and it is advisable to attend to it.. In recent months some investment funds have entered dollars with the purpose of investing in pesos at a rate. The minister’s financial bicycle allows it Caputo, which provides for a 2% monthly devaluation to “ensure” an attractive dollar rate. Nowhere on the planet would these investment funds be guaranteed that return. But everything has an end.
luis caputo
Reuters
These investment funds are going to ask the minister for a window to be able to crystallize their investment. Said in Creole, go from pesos to dollars as soon as you can. Logical, with reserves in the Central Bank that are still negative, The Government waits for the liquidation of the field to pay the investment funds on the desk. He IMF he knows.
On his last visit to Argentina, the director for the Western Hemisphere Rodrigo Valdés raised his doubts in an encrypted way. The organization seems to realize something: if the IMF sent those US$5 billion to the country, wouldn’t Minister Caputo end up using them to “pay” the investment funds that came to carry out the financial cycle? Suspicions have been brewing in Washington for some time. Not for nothing, Georgieva herself seems to be personally in charge of the matter.
The IMF expects the Government to do its homework first
This is how we understand what happens every time the IMF approaches the Argentine case. He asks the Government for the “sustainability” of the planThat is, it asks that the resources be allocated to “consolidate” the stabilization of the economy and the financial front.
Of course, the IMF wants to consolidate the adjustment that the Government is carrying out, but does not trust the method chosen to show the twin surpluses. He publicly requests Caputo change that recipe for another. Ensure that the resources that the Government has available are injected into lower-income households so that there is no danger of social outbreak and the reforms can be consolidated.
This is also how the president’s strange mechanics are understood. Mileiwho sends his ministers to negotiate with governors a potential political agreement to carry out the laws he needs, but at the same time, he cannot avoid confronting and insulting “the caste” so as not to lose political capital.
Javier Milei Kristalina Georgieva IMF.jpeg
It is the IMF that asks Milei to consolidate with laws the reforms underway through Congress because it does not trust the plan underway. Only in this way would it support the course set out in the economic plan and could release the US$5 billion that the Government needs to pay the investment funds, although it would not serve to lift the stocks.
Meanwhile, in this whole story, the dollars from the countryside will go, in part, to pay the interest rate on the funds that entered a few weeks ago. That is one explanation, among others, of Argentina’s rising price in dollars and the “delay” in changing the devaluation strategy to 2%. Is it convenient for the Government to devalue the peso? It seems not. It would cut the “rate” on the funds that are invested in pesos and that want to exit.
On the other hand, it is not advisable to devalue before buying the dollars from the field. You need to issue the smallest amount of pesos in order to keep the largest amount of currency. The other way around doesn’t work. But the countryside is asking for it.
Source: Ambito
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