The IMF will allow a portion of the next disbursement to be used to intervene in the exchange market A key negotiation in the coming months

Government will have Approval of the International Monetary Fund (IMF). A portion of the extra cash the agency makes can be used to cover losses due to drought. Central Bank and Treasury can intervene in foreign exchange and capital markets Control the exchange rate gap and avoid devaluation.

Now, according to sources at the Palacio de Hacienda How much is debated Available to the government to operate in the market. This is a very sensitive point because it is expected The current situation of very low BCRA reserves and the political-economic noise caused by PASO and then the presidential elections Episodes of exchange rate tensions occur, affecting social sentiment, inflation and political stability in general.

It is expected that the team will be led by the Deputy Minister Gabriel Rubinstein and counsellor Leonardo Madgur, who maintain technical security along with their counterparts from the fund, will travel to Washington next week. A few days later, the Minister of Economy, Sergio MassaThe negotiations will be formally concluded.

Instability of funds to authorize intervention in exchange market, in this case it will be excluded Support the current administration’s decision2018 and 2019 saw dramatic results under Mauricio Macri’s administration. Many situations of lack of regulation and exchange panics ended in large stock losses And they almost led to the early end of that government, which had to reposition the stake in order to survive.

Now, the financial approval comes in Negotiation of new money entryA possible improvement in facing the maturities with the organism, which allows to offset the financial losses that the drought creates.

Re-calibration

In fact, it is a parenthetical or a A renegotiation of that contract. It will happen Concrete targets are not met Foreign currency supply and tax collection as a result of the massive impact of drought. In addition, Massa breached the contract by using reserves To intervene in the last bullfight will change.

The government’s financial support is primarily due to the political will of the Joe Biden administration to avoid a major crisis in the country. This happens in the middle of a trip to China on Massa’s behalf Swap expansion announcements, new supplies for dams and yuan trading regimeImportant tools in the medium term, the Asian country will not have too much interference to smooth the government’s descent into the electoral process in the short term.

The situation is complicated by the emergence of drought disaster The schedule of payments for this year was initially expected to be unfavorable to the state. Unlike last year, when IMF disbursements exceeded disbursements, the numbers have now reversed: the next expected drain is nearly $4 billion, which is $2.68 billion at the end of June, 2.63 billion in July and insufficient to cover 787 million disbursements. August. Then, the 3.3 billion collection in September will not be enough to cover the maturities till the end of the year.

Not only does the International Monetary Fund recognize the failure to meet targets as a result of the drought, but MASA’s mission Send agreed amounts throughout the year as emergency aid. In addition, extension of payment terms is being explored so that funds are sufficient to increase reserves. Still, if the fund agrees, it will be a huge sign of support for the outgoing government.