“Another Sacred Cow Died”, Held at the Ministry of Economy. Fearing the impact of mandatory dollarization of portfolios during elections and in the midst of severe drought as dollars are needed, Close to Sergio Massa, they confirmed that they already have a guarantee to intervene, with part of the International Monetary Fund (IMF) disbursement in Argentina – an unspecified amount. The official aim is to avoid a new currency run that would reduce the ruling party’s chances in the elections and keep inflation high.
Besides, On the fifth floor of the Palacio de Hacienda, on Monday, June 12 – near the end of the listings – they are sure to seal the deal with the organization led by Kristalina Georgieva. This leads to being known in jargon Employee Status Agreement. This concerns the agreement with the Technical Committee following the Argentine case.
This is necessary, then, after the fifth review of the Expanded Facilities (EEF) program – after many more internal review steps – has come. Board (Directory) For final approval, it will take another two to three weeks. Only then will the remittances be made and the details of the agreement fully withdrawn after failure to meet fiscal, monetary and reserve accumulation targets as a result of the economy, drought.
Nation The fund was consulted for information arising from the economy, but its spokesmen – as is usual at the institution – did not want to provide more details about the ongoing negotiations.
Last week, this media reported that the Argentine authorities and the IMF are no longer negotiating the amount of the provision, but rather the percentage of use of the intervention. In the last hours, the economy confirmed that, in fact, “The ability to intervene is confirmed.”
Last Thursday after such confirmation was given, Massa decided to allow the disruption of financial dollars almost $30, according to what Economia pointed out, the “financial curlers” who were children, in turn, decided to end the official intervention in those quotes. Silence the last transfer stream. In the Ministry of Economy, they denied that the jump in the exchange rate, which ended in the adjustment of certain values โโโโof “free dollars”, was an open request to open payment and intervention authorization from the IMF. According to private estimates, losses from these operations have already exceeded US$700 million.
The possibility of intervening in the exchange market is a problem for the fund because not only does it want to collect its debt, but its law also prohibits it from financing a continuing outflow of capital with loaned money. In recent weeks, reports indicated that the IMF was demanding a 30% devaluation to advance the loan. Massa, like Christina Kirchner, opposed a sudden devaluation amid accelerating inflation that could end the year with a 130% or 140% increase. Although the economy has denied delays, the talks have delayed negotiations between Massa and the Fund.
Regarding the company’s future cash payouts, official sources have already told this media that the fund has given an amount that the economy considers low, arguing that the current year is an election year. Massa claimed the possibility of using 60% of the supplies. A multilateral agency will contribute 20%.
Massa will travel to China (first to Shanghai and then to Beijing) at the end of the month with officials not involved in concluding talks with the IMF. The minister also hoped for open support from the BRICS (Brazil, Russia, India, China and South Africa) group of countries, especially the Chinese central bank. Tigrense will seek an update and an increase in coin exchange (free coins) in the country. They counted.
On June 20 and 21, Argentina has capital maturities with funding for USD 3 billion. As they believe in economics, if there is already an agreement on the level of covered staff, the country could easily back out (as has already happened) until the group’s approval. The IMF can waive disbursement payments over USD 4 billion for 3 billion SDRs (the Fund’s currency).
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