Today the IMF board of directors meets and the Government awaits the change in the goals that Argentina must meet

The board of directors of the Monetary Fund will debate this Friday the fourth revision goals of the program with Argentina and will enable the disbursement of $5.3 billion with which the Government will automatically return $2.7 billion to cancel the pending expiration with the agency. The discussion in the board It will also include, in a more decisive way, a look at the economy to come, with respect to the latest government measures, the easing of the reserve goal due to the drought and how the implementation of the agreement will continue.

The Ministry of Economy expects that in the next few hours the directors of the Monetary Fund will publish the official statement of approval of goals by the end of 2022. They also know that it will be accompanied by a mention of the current economic situation and the impact of the drought, something that in its fine numbers is still a matter of debate between the two parties.

At the Palacio de Hacienda, they were celebrating in the last hours because they glimpsed that the IMF’s admission that the drought had a considerable macroeconomic effect and the new, less demanding goals for reserve accumulation was the merit of the technical back and forth of the last two months. This Friday’s board meeting appears on the IMF’s official agenda on its website, although it only mentions Ukraine as a topic to be discussed. In the government, unofficially, they took it for granted that the fourth Argentine review will also be discussed.

The consensus reached with the staff and that today must be revalidated by the Fund’s board of directors will imply a cut of about $2 billion in the pattern of collecting foreign currency in the BCRA, which would amount to $3.5 billion considering only the first trimester.

The objectives of the first quarter of this year will be discussed in the coming weeks. The reserves, even with the change that the board of directors will promote this Friday, will continue to be challenging according to private estimates, while the horizon of fiscal deficit cut It also started with pressure due to the sharp drop in tax revenue due to the lower amount of withholdings collected, another consequence of the drought.

There is still a gap between estimates of the overall impact of the drought on the economy this year. The technicians in Washington do not move from the $13 billion as net currency settlement loss, when local estimates are already around the $20 billion.

The Minister of Economy announced this Thursday that he will launch a differential exchange rate for different sectors that make up agriculture to “strengthen reserves in the second quarter and continue the path of stabilization that Argentina has to follow.” Although this is a type of measure that the IMF often questions, the latest statement from the staff I had opened the door for “temporary” exchange rate measures of this type.

As specified from the Palacio de Hacienda, the measure will consist of a differential change for 30 days for the soybean complex and 90 days for exports of goods from regional economies as of April. One of the purposes of the initiative will be to strengthen international reserves in $15 billionestimated official sources.

“It is a program to increase exports that aims to facilitate the capacity and compliance with the contracts of our exporters in the dry year, understanding the difficulties that our producers suffered,” said the minister.

Massa today held a meeting in Washington with the undersecretary of Economic Development, Energy and Environment, Jose W. Fernandezin which the bilateral agreement with the United States was signed after the refinancing of the debt that Argentina maintains with the creditor countries of the Paris Club.

The Ministry of Economy reported that “with the signing of the Paris Club agreement, the restrictions on accessing foreign trade credit of the United States for the Argentine private sector”.

“With the aim of continuing to order and regularize international financial relations and continuing the path we began in October of last year when we signed the general agreement with the Paris Club, today we sign a specific bilateral agreement with the United States,” said the head of the Palacio de Hacienda after the meeting.

In this sense, Massa highlighted that “in 2019 Argentina stopped paying the member countries of the Paris Club and now we are regularizing it, so these advances open the door to the search for new strategic investment projects with financing.” international”.

Broadly speaking, the agreement with the Paris Club rescheduled the payment of $1.97 billion in six years. The return system will be through a calendar of thirteen semester installments, whose first transfer took place last December and which includes part of the principal owed and also interest. The last payment will take place in September 2028.

The agreement reached with that body also provides that the 40% of the outstanding balance is canceled throughout 2024. According to estimates in Economy, the annual payments will oscillate between USD 240 and 390 million per year and were estimated to fall at times when the debt schedule should be most relieved.

The weighted interest rate will be 4.5% annual. Initially, the interest will be 3.9% and it will go up gradually. In October of this year he will climb 4.5% and that it will increase again until 5.2% percent in April 2027.

Keep reading: