Experts anticipate what the IMF will ask Argentina to close the agreement

A report by the Argentine brocker TPCG Valores focused on the conditions that the Monetary Fund can claim from Argentina to finalize the delayed debt refinancing agreement. In this sense, it is anticipated that the IMF will impose explicit targets on the country on the nominal primary deficit, nominal monetary financing and the accumulation of reserves. international net . The most likely scenario is a new Extended Fund Facility program, where the IMF disburses tranches of a new loan before each of the old program’s maturities, on the condition that Argentina meets a series of performance criteria, according to details of the report released by Bloomberg. The TPCG document, prepared by economist Juan Manuel Pazos, affirms that the fiscal objective should be the simplest of the three objectives. “ It is likely that the financing objective will be more restrictive, which could force a stricter consolidation ,” assessed Pazos. And he added: “The objective of accumulating reserves seems to be the most difficult to meet.” The baseline scenario assumes a primary deficit of 2.5% in 2022 and as the current real effective exchange rate is “inconsistent” with the accumulation of reserves after the first half of the year, the probabilities of a one-time devaluation increase in the second semester. The foreign exchange market model finds that offsetting the impact of the exchange gap on the current account would require a 30% correction of the REER. “Without a considerable compression in the ‘gap’, the reconstruction of the NIR position requires that the terms of trade remain close to record levels and that the financial account deficit be adjusted,” concluded Pazos.

Government: lack of international support to close the agreement

In the national government they admit that the possibility of an agreement with the IMF still does not have the necessary support from the international community , although they hope to achieve them with the progress of the negotiations . “There is not the full support of the international community. Each government will decide when to express itself,” said today a qualified source from the Ministry of Economy, who admitted that this is one of the obstacles that still exists in the negotiation. Hence, the meeting that next Wednesday from 5:00 p.m. at the Bicentennial Museum will be led by the Minister of Economy, Martín Guzmán, with the governors, is considered relevant. “We are going to explain what the status of the negotiation is and we will inform you of the current geopolitical situation,” they indicated near the head of the Palacio de Hacienda. Given this situation, officials of the Palacio de Hacienda will hold during this week special meetings with businessmen to continue explaining details of the conversations with the IMF, and eventually the complications that delay signing. Next week it will be the turn of the heads of legislative blocks, who will then have to carry out the discussion in the National Congress.

From the Palacio de Hacienda they clarified that the meeting with the governors will be descriptive of how the conversation is being addressed, but without leaving room for them to introduce their perceptions. “We are going to communicate the goals, the performance criteria that are going to be taken, and what we need to reach an agreement,” they insisted on Guzmán’s proximity. The program under discussion is an Extended Facilities agreement and will have three topics: fiscal path, monetary issue, and reserve status. “These are the three central points on which Wednesday’s presentation will be based,” the sources asserted, adding that “it will be the basis of the multi-year plan that will be presented.” In a change of view from past programs, the IMF would agree to include the price agreements as part of the plan to contain inflation . “The IMF is awaiting the result of the rounds of price agreements that Commerce Secretary Roberto Feletti is carrying out,” the sources revealed. “There needs to be a commitment from the entire community to carry out a task that will take many years. That is why the price agreement is important and that wages have a normal nominal path,” they affirmed. Know the value of the dollar in Dollar Today and followed the price and behavior minute by minute. CLICK HERE