A mission travels to Washington to ensure the disbursement of US$ 5.8 billion from the IMF

Monday, November 21, 2022 | 7:34 p.m.

An Argentine mission will travel at the end of the month to finalize the negotiations that will trigger a new disbursement of US$5.8 billion from the International Monetary Fund (IMF) before the end of the year, and will seek to renegotiate the prospects for 2023 of the agreement with the organization, in the context of the continuation of the war in Ukraine.

This was confirmed to Télam by official sources, who were satisfied with the result of the talks with the IMF both in Buenos Aires and in Bali, in the week that the G20 president’s summit was held in the Indonesian capital, which coincided with the technical visit of the Fund to Argentina, within the framework of the third revision of the program for US$ 45,000 million, which refinances the previous one inherited from the management of Mauricio Macri.

The Argentine team that will travel to Washington at the end of the month will seek to close the negotiations of the third review with the IMF and “discuss the perspectives of the program for 2023,” said sources close to the Minister of Economy, Sergio Massa.

In this sense, the source stressed that the important thing for the country that the meeting of President Alberto Fernández with the head of the Fund, Kristalina Georgieva, and the G20 summit left “is to have already left open the discussion regarding the price of war, with the IMF”, which Argentina estimated at US$ 5,000 million.

This is a figure similar to the amount of minimum reserves that Argentina had to accumulate by the end of the year, of US$5.8 billion.

Likewise, from the G20 the matter of the overloads of the programs with the IMF was emphasized again.

And Fernández took Georgieva’s promise that “the surcharges will be discussed in December because Argentina is paying the Fund twice the interest rate than, for example, the IDB, and that is absurd when the lender of last resort is the IMF”.

In this way, the Government estimates that annual surcharges must be paid for a total of US$ 1,000 million, due to the magnitude of the program that the country maintains with the agency.

The Argentine economic team that accompanied the President also expressed the greatest margin for negotiation in the new context, after having achieved a doubling of freely available reserves, as a result of the new agreement with China, which released the equivalent of US$ 5,000 million of the reserve swap that it maintains with the country for freely available use.

Until now, the IMF did not take into account the Chinese swap, since the Government had no power to maneuver with these funds.

“The most substantive change in the swap with China is that the agreement releases 35,000 million yuan, which is approximately US$ 5,000 million, freely available so that the Central Bank can use it in commercial operations and in the Argentine single and free exchange market. “, they highlighted.

In short, “the freely available reserves doubled, since the BCRA went from having US$5,000 million as a result of the collection of the soybean dollar, to US$10,000 million as a result of the release of part of the swap in the agreement with China” .

“With which Argentina has US$ 10,000 million available to work in the single and exchange-free market,” they emphasized.

From the official delegation they remarked that this measure helps to loosen the productive pressure due to restrictions on imports, and is “important for the productive sectors of Argentina because it allows them to access the flow of dollars for imported inputs and intermediate goods.”

Meanwhile, the IMF technical review in Buenos Aires concluded last Friday, the conservations will continue virtually until the arrival of Argentine officials at the end of the month, and the negotiations are expected to last until the first days of December.

If everything goes on track, Argentina would receive a disbursement of US$ 5.8 billion, which will basically serve to pay the bulk of the maturities scheduled for before Christmas, of the program with the Fund.

“It is very important that Argentina maintain the course as it has done so successfully in recent months,” said the head of the Fund when she left the meeting with Fernández last Wednesday, in which Massa also participated.

Source: Telam

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