“The agreement with the IMF has to be part of an economic plan” / Argentina News

During the inauguration of Jorge Macri as Minister of the Buenos Aires Government -after having requested a license as mayor of Vicente López-, the Head of the Buenos Aires Government, Horacio Rodríguez Larreta, maintained that an eventual agreement with the International Monetary Fund (IMF) will have to be submitted to Congress, where it will have its own bench of legislators.

“Any agreement with the IMF has to be discussed in Congress, which is the environment for natural dialogue. We will always be with the best predisposition. Whatever is good for Argentines, we will accompany them,” Rodríguez defined this morning. Larreta, within the framework of the Cabinet change, and stated that “the agreement with the IMF has to be part of an economic plan.”

According to the head of Government, This roadmap must specify “how are we going to grow again” as a country, “How are we going to be a more federal country and get businessmen and entrepreneurs to invest”. “We have to export more, that is an economic plan that we hope the Government will present in Congress,” he reiterated.

Is the agreement with the IMF closed?

The delegation of Economy and Central Bank officials that this weekend will travel to Washington to try to close an agreement with the International Monetary Fund it contemplates an adjustment of public accounts and the promise of an acceleration of the “crawling peg” (daily mini-devaluations).

Martin Guzman You will stay in Buenos Aires but you already know that the IMF negotiators will raise a greater adjustment of the fiscal deficit. The agreement will depend on the resolution of how to order the imbalance of the public accounts.

There is also the intention that the IMF reimburse, over the next year, the payments made by Argentina throughout this year, some US $ 4,500 million.

The main concern of the minister is that the objective of recomposition of the Central Bank reserves.

Guzmán confided to his own team, in the last hours, that the IMF is not demanding an abrupt devaluation – in a single jump – despite the fact that the exchange gap exceeds 100%.

However, the compromise is that the official exchange rate it will rise more rapidly after the agreement with Washington is closed.

“You will not recover appreciation of this year “, the minister confided to his team of collaborators.

The details

Of course: the commitment is that the official exchange rate start to rise at the rate of inflation, which is now around 3% but could be higher in the first months of 2022 due to the rise in public service rates.

The primary deficit that officials carry to USA it contemplates 3.3% of GDP. However, Guzmán already knows that Fund staff claim one point less red. The number, for the IMF, should be 2.3%. That is why the negotiation of the next few days will be key.

Another point of conflict is the issue of rates. Guzman promotes a segmented recomposition of electricity and gas rates. The final number of that upload will be written upon return from the trip.

But the relevant fact is that officials will tell the Bottom that the tax savings from the rate increase be applied to public works. As already published iProfessional, Cristina Kirchner endorses the agreement with the IMF on the condition that there is no adjustment in investments in infrastructure.

According to the minister, the growth of GDP it will be 4% next year, something that the IMF does not quite accept. The agency’s technicians believe that Argentina lacks dollars to ensure that expansion.

Another point under discussion refers to the financing of the fiscal deficit: Guzmán has as a proposal that it be through credits from multilateral organizations (IDB, World Bank and CAF). The IMF casts doubt on the success of this scenario.

The Argentine delegation contemplates an adjustment of public accounts and the promise of an acceleration of the “crawling peg”

Negotiations with these organizations are carried out Gustavo Beliz, Secretary of Strategic Affairs of the Presidency.

The IDB, for instance, objects to the financing plan since loans to the Argentina weakens your credit quality.

The negotiation – it is known – should lead to an agreement with a ten-year term, with a four-and-a-half-year grace period.

With Cristina’s endorsement and the technical closing of the negotiation, the Government will send the agreement to the Congress before Christmas. The idea is that the law comes out before the end of the year.

As advanced Cecilia Todesca Bocco, Alberto Fernández’s trusted economist and secretary of International Economic Relations of the Foreign Ministry, the Government will pay the maturity of almost US $ 1,900 million with the IMF with the SDRs that the organism itself sent a couple of months ago.

Know the value of the dollar in Dollar Today and followed the price and behavior minute by minute. CLICK HERE