Monday May 15, 2023 | 9:17 p.m.
The International Monetary Fund (IMF) assured tonight that they are “evaluating the measures” announced by the Ministry of Economy and remarked that negotiations are advancing “to strengthen” the reserves of the Central Bank.
“We are evaluating the measures,” a spokesperson for the International Monetary Fund responded to the Ámbito query. “As we have said previously, we continue to discuss ways to strengthen the program and safeguard stability in light of the severe drought. This includes policies to improve fiscal sustainability and strengthening reserves, both essential to reduce inflation, while protecting the most vulnerable,” the spokesperson added.
This Sunday a series of economic measures were known with the purpose of stopping the rise in prices. The economic team worked over the weekend and held talks with the IMF technical staff.
Of the measures announced, the rise in the interest rate is a tool that the agency usually demands that it be applied. It should be remembered that this Monday the Central Bank raised the interest rate by 600 basis points to 97%. It was also known that the intervention of the monetary entity in the exchange market will be increased together with the administration of the rhythm of the crawling peg.
In this context and with the lack of foreign currency, the economic team is negotiating a modification of the objectives of the current program (contemplating the impact of the drought that will subtract more than US$ 20,000 from the BCRA coffers).
As Minister Sergio Massa himself pointed out, “In the last summit, the Fund raised the idea that the drought became a game changer for the program and invites Argentina to re-discuss within the program. You are invited to rethink short, medium and long-term objectives”.
In this stage, the commercial flows continue to be analyzed with the agency’s technical staff to later define the disbursements or reimbursements in the Fund’s program. The official intention is to achieve an advance of more than US$ 10,000 million. According to the Palacio de Hacienda, in the conversations with the agency everything is open and even the ability of the Central Bank to intervene.
At the moment, there is no defined date for the closing of the negotiations, but, as Ámbito learned, the expectation of the economic leadership is to reach an understanding with the technical staff towards the beginning of June. In this way, it would be sought that the Board of Directors approve the reformulation of the program in the second half of June.
Given the shortage of foreign currency that overheats the different types of dollars, from Economy they explain that they activated the China swap. The official expectation regarding the negotiations would culminate at the end of the month in China, is to extend this swap up to US$19,000 million. For now, the concrete thing is that in June the swap will be renewed for USD 5,000 million.
Source: Scope
