The National Government, with Sergio Massa in the leadcontinue the negotiations with the International Monetary Fund (IMF)). This occurs amid doubts about whether a debt maturity set for this week.
The goal is to get the advance of disbursements of the organism after defining new goalstaking into account the damage caused by the drought in terms of reserves, collection and fiscal objectives.
Economy Minister Sergio Massa would only travel to Washington when there is written agreementaccording to sources from the Palacio de Hacienda.
Negotiation is not easy, since there are member countries of the Monetary Fund -such as Germany and Japan- that They demand a very firm commitment from Argentina that this time it will meet the agreed goals.
In the conversations, the latest statements by Vice President Cristina Kirchner, who demands a comprehensive renegotiation with the multilateral organization, whom he questions for having granted at the time a record loan to the administration of Mauricio Macri.
Agreement with the IMF: what is Argentina’s objective
Argentina seeks an advance on the disbursements of the agency to intervene in the foreign exchange market y guarantee some peace of mind in the previous election.
But IMF technicians fear that foreign exchange interventions, without correcting the exchange rate, will end liquefying a good part of the advanced funds.
In the financial market there is also concern not only the amount of reservations, but also the quality, since they include a increasing share of SDRs -the IMF currency- and yuanthe Chinese currency that has been devaluing against the dollar in recent weeks.
The government should comply a payment to the IMF for US$ 2,700 million no later than June 30. With that scheme, it would be almost impossible to unlock the new disbursements before that date.
For this reason, everything indicates that Argentina will have to pay the agency with dollars for the first time, which seeks to be changed by the negotiators chosen by Massa.
It also worries that the BCRA has negative net reserves of US$ 1,600 million and, if the US$ 2,700 million are paid to the IMF before the next disbursement, they will become negative in more than US$ 4,000 million, which would reinforce the pressures on the exchange rate.
Massa’s objective is that once the general scheme of the agreement has been closed, officials from his team travel (surely Gabriel Rubinstein y Leonardo Madcur), and when it is written, he would go to sign it.
Agreement with the IMF: the concern of the international organization and the items for negotiation
A few days ago, IMF Communications Director Julie Kozack said at a conference in Washington that IMF staff and Argentine officials continued to work “hard” and “very closely” to move Argentina’s program forward with the IMF.
He detailed three objectives of the negotiation: safeguard stability, improve fiscal sustainability and strengthen reserves.
“The teams have been working very hard together. The situation in Argentina is very complex,” Kozack warned.
In the Argentine government they speculate that the Fund is not willing to let the program with Argentina fall through because This credit for more than US$ 45,000 million granted to the Macri government represents 40% of what was committed by the agencywhere the internal ones also weigh.
However, “there is an important group within the Fund that thinks that it is too risky to advance all disbursementssaid former director of the Western Hemisphere Fund Claudio Loser.
The expectation is thatthe IMF refinances the maturities between now and September (US$ 6,815 million) and grant an additional amount for drought difficulties that would serve to cover the needs of the next quarter,” said Loser.