It will be five frantic days in the Ministry of Economy because the continuity of the ongoing agreement with the International Monetary Fund (IMF) will be at stake under the terms that were signed in March 2022.
What the Kirchnerist wing of the ruling coalition could not do via political action – the comprehensive renegotiation of the program – could come to pass due to the pressing reality that put the core variables of the current agreement in jeopardy.
In a supposed agreement with the IMF, the government announced that it was postponing the payment of the maturities that operated on Tuesday, March 21 and Wednesday, March 22 for US$ 2.7 billion for Friday the 31st.
The extension sought to save time until the Board of Directors meeting that must endorse the accounts as of December 31, 2022, which at the same time triggers a disbursement of US$ 5.3 billion.
Although the approval is discounted by the recommendation already raised by the technical staff, what is not so clear is when the conclave will take place to raise their hands and turn the financial relief.
In a press conference, the spokeswoman for the IMF, Julie Kozack, evaded the answer to a specific question and limited herself to saying: “Hopefully it takes place very soon.”
Without this confirmation, the week will be stressful for the Central Bank, which accumulates sales of more than US$ 1.2 billion in March and is not in a position to distract more than double, even if it is not for a few days.
In any case, the US$ 5,300 will be in the BCRA’s coffers just a sigh, since in addition to the US$ 2,700 next Friday, until April 21 other payments will be made to the agency for another US$ 2,600 million .
In the Palacio de Hacienda there are those who do not rule out that the delay in setting the date is due to some type of political pressure.
On the other hand, in these five days the fiscal deficit target for the first quarter will also be played, which should not exceed $430 billion, as committed.
Between January and February, the accumulated imbalance in public accounts climbed to $420 billion, which left the quarterly guideline at the default limit. In the year, Argentina must achieve a primary deficit of 1.9%.
The monetary issue behaved similarly. According to data released in the last few hours, on March 17 the Central Bank transferred $130 billion to the National Treasury, against a limit of $139 billion authorized.
Thus, after eight months without requesting assistance from the BCRA, the promise of the Minister of Economy, Sergio Massa, was broken. Throughout 2023, temporary advances may not exceed 0.6% of GDP.
With the reserves goal already under review, the agreement now has its three central variables in check: one of them is in the process of being modified and two are on the brink of default.
To this combo was added the debt swap of dollarized bonds in the hands of public organizations, an operation with which the IMF was cautious.
“We are analyzing it within the current program,” was the response of Kozack, an official who knows the agreement with Argentina inside out because she was part of the team that made it.
The official pointed out that there must be a “prudent” management of the debt to improve the functioning of the domestic bond market and that it does not increase “vulnerability”.
Faced with growing criticism, Massa came out on Saturday to report that he will ask the University of Buenos Aires (UBA) for an opinion on the controversial swap.
“I made the decision that the UBA, through the Faculty of Economic Sciences, make an opinion to see if the exchange is beneficial for the ANSeS. If the opinion says that it is not beneficial, ANSeS will not intervene in the exchange, ”he promised.
Kozack also insisted that Argentina cannot deviate from the path of advancing in the necessary adjustments to balance the macroeconomy, which translated into plain language implies that it must continue with the policy of cutting public spending, even overcoming the challenge implied by the drop in prices. drought income.
“In a more challenging economic context, in particular due to an increasingly severe drought, stronger political measures are needed to preserve stability. These stronger actions are also needed to address rising inflation and policy setbacks,” he said.
The described scenario only increases the uncertainty about the decisions that the IMF may adopt in the pending meeting.
It should be remembered that the text of the agreement has a point in which it establishes that the objectives are set with the global economic and financial conditions and of the country as of January 2022 and that in case of substantive changes, a dialogue instance is enabled to make the modifications. necessary.