Monday, January 9, 2023 | 12:15 p.m.
After completing the third review of the agreement with the approval of a disbursement of almost US$6,000 million, the Government has already closed the goals set for 2022 and begins a stricter 2023 in relation to compliance with the agreement with the Monetary Fund International (IMF).
The new 2023 goal calendar began to run
First of all, the last day of the year closed the period that will be taken as a reference to review the agreed objectives in 2022, although that discussion will take place formally in March. Likewise, from this week the new goals calendar began to run and this Monday they will have to face expirations with the organization. According to estimates by the Palacio de Hacienda, they will be around US$2.6 billion between the commitments with the Fund and the debt restructuring bonds of the former Minister of Economy, Martín Guzmán.
Program with the IMF
The program with the IMF is structured on three fundamental bases:
- The reduction of the fiscal deficit
- The accumulation of international reserves
- Monetary assistance to the Treasury
The reserve goal is the most difficult for the Government to achieve. After implementing the two mechanisms known as the soybean dollar, the objectives could be met, but with certain caveats, since, in the last review, the Fund granted a waiver for “exchange restriction measures and multiple exchange rate practices.” and asked that these initiatives be removed when conditions allow.
What is a waiver
The waiver is the unilateral legal act by which a person expresses his will to permanently or temporarily discontinue the enjoyment of a right or to extinguish a legal relationship.
On this point, by 2023, the agreement plans to add US$500 million in the first quarter of the year, mainly because they hope that in this period the drought will not allow a higher foreign currency inflow, official voices of TN assure.
In the Government, they know that for the agreement with the Fund to be fulfilled, they run the risk of suffering the blows of “imponderable” events, such as a greater extension of the drought, a rise in energy costs for the months of high demand or soaring inflation beyond what is projected in the Budget. “If everything evolves normally, the goals are met. We are monitoring the situation in the countryside”, an official from Massa’s cabinet defends himself.
They activated the swap agreement
This Sunday, the president of the Central Bank of the Argentine Republic (BCRA), Miguel Pesce, met with the Governor of the Bank of the People’s Republic of China (PBC), Yi Gang, and confirmed that “the swap agreement for currencies in force between both institutions”, which includes the exchange of currencies as a reinforcement of international reserves for 130 billion renminbi yuan and a special activation for 35,000 million that allow the free availability of these funds, which are around US$5,000 million, for clear foreign exchange market operations.
For the IMF, the numbers presented by Economy are higher, but the truth is that Massa’s team hopes that these losses will make some issues of the agreement more flexible, such as alleviating interest or reviewing the transfer of funds.
