The level of reserves is in danger. The government would have no choice but to depreciate the peso again by around 110% or more, resulting in extreme poverty for 90% of the population in 4 months.
Today we can say that the BCRA has practically been emptied since last June.
Depositphotos
Since shortly before July 9, when the bondholders of the debt restructuring of September 2020 were due to be paid, we knew that we were in a very fragile situation in terms of the BCRA international reserves and this is always represented with the values of the risk country which was already hovering around 1,490 basis points.
On July 9, that value was exactly 1,491 and then we learned that the reserves, both hard currency (US dollars + yuan) and cash (gold) are falling dramatically.at the very least, due to the incompetence of those responsible, since since the beginning of last June, 11,000 kilograms of gold bullion have been transferred – which were repurchased in 2021, after this same economic duo put it up as collateral in 2018 without recovering it in 2019 – in order to obtain a very short-term loan for US$ 4.7 billion from Bank of Baselas of mid-June, the Minister used DNU 23/2024 to withdraw US$ 3.2 billion in physical form from the BCRA to the National Treasury, and on July 14, the Secretary of Finance, Pablo Quirno, announced that US$ 1.525 billion would be sent to pay the capital and interest amortization of January 9, 2025 to a trust in the United States (which has the same regulations on the matter as in our country) with only the signature of the Minister – although to give it greater transparency it should have been a trust in our country with the joint signature of the Minister and the Auditor General of the Nation who belongs to the opposition.
After also lying about the issue to control the alternative exchange rate quotes and using the 4.1 billion remaining bonds from the 2020 issue, each with a nominal value of US$ 1, this past week the minister traveled to the G20 summit in Brazil to meet the number 1 of the IMF Kristalina Georgieva and the US Treasury Secretary Janet Yellen.
After the meeting with the first, the IMF issued a statement on the meeting requesting that the Argentine economy leave the Austrian school to return to economic orthodoxy and really take care of the most vulnerable, the minister early on Friday reports that he is going to meet with the US Treasury Secretary and briefly manages to lower the country risk from the 1,590 that closed on Thursday 25 to 1,529, as the hours go by and it is noted that if the meeting is held, they are not going to grant a new credit of between US $ 10,000 and 15,000 million, the country risk rises again and is set at 1,562 basis points, that being the final value of the week despite the fact that Mr. President since his tour in France for the opening of the Olympic Games communicated that by the end of the year the new credit could be given for the remainder of the 13.5 MM not used when in 2019 President Alberto Fernández asked not to receive them because, as reality has shown and is happening today, the 44.5 MM received by Mauricio Macri’s government since the signatures in May and August 2018 have become unaffordable.
Today we can say that the BCRA has practically been emptied since last June. and without the possibility of recovering the 11 thousand kilos of gold bullion pawned for US$ 4.7 MM, nor how to repay the new credits that they are managing with the IMF for close to US$ 14/15 MM and with international banks for US$ 2.8 MM, unless they could have some type of personal return or just continue to put the country into debt in amounts that double the debt of 2001c which was US$ 230 MM IN TOTAL. If none of this comes to fruition, the Government would have no other option than to depreciate the peso again by nearly 110% or more, resulting in extreme poverty affecting 90% of the population in four months.
ECONOMIC ANALYST AND TAXIST
Source: Ambito
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