Also, most of the local shares listed on Wall Street (ADRs) ended positive. The papers that benefited the most in New York were those of Transportadora de Gas del Sur (+6.7%).
The Executive Branch announced this day that the differences with the IMF staff were settled and an Extended Facility Agreement (EFF) was reached to refinance a debt close to US$45 billion, which will not include structural reforms.
The repayment period of each disbursement from the multilateral credit organization is 10 years, with a grace period of 4 and a half years, which implies that the country will begin to pay the debt from 2026 and until 2034.
Regarding the economic policy objectives, the Government will advance in a process of fiscal consolidation to approach a balance of public accounts by 2025. According to the official statement from the Ministry of Economy, this will be sought to be achieved through the recovery of economic activity without spending cuts.
At the same time, the deal contemplates a path towards positive interest rates in real terms and a real exchange rate compatible with the reserve accumulation objective.
Regarding energy tariffs, it was assured that the Government “is determined to achieve reasonable tariff levels that can be applied with criteria of justice and distributive equity for public gas and electricity services, in accordance with the objective parameters that correspond in each case”.
According to reports, the higher-income sectors will pay the full rate from now on, that is, they will not receive subsidies. At the same time, the beneficiaries of the social rate will have an increase limit equivalent to 40% of the variation in wages in the last year, while the remaining population will receive a rise equivalent to 80% of the movement of the Salary Variation Coefficient (CVS) .
Next week the agreement will enter Congress. The debate will take place against the clock given that Argentina faces a maturity of some US$2.8 billion in March, which could be avoided if the agreement is approved and would help maintain the scarce net reserves of the Central Bank, which does not have enough foreign currency to make said payment.
“For the market it will be essential to have this tool with legislative backing, which gives hope for a little more financial predictability and this is reflected in the ‘blue’ (informal market),” explained a foreign exchange agent.
Meanwhile, the international financial scenario continues to focus on the geopolitical impact generated by the conflict between Russia and Ukraine.
Country risk and bonds
In the fixed income segment, dollar sovereign bonds also reversed losses after the official government statement and closed with disparity, in a scenario of risk aversion in international markets, as a result of the war between Russia and Ukraine, which affects emerging countries.
“Dollar bonds outlined timid rises after the announcement, but closed with mixed numbers. The weighted average price closed at US$31.82 (-US$0.06 1D; -US$1.38 5D). The key is next few days will be in the debate within the enclosure and the political support that the Government needs to obtain before March 21”, deepened from the portfolio company Portfolio Personal Inversiones.
In that framework, the country risk measured by JP Morgan climbed 10 units to 1,850 basis points.