Outside, they repair the reperfilation

Below is the most relevant of the IIF report.

Capital outflows from residents tend to be large before the elections and can put pressure on international reserves at a time when the scale of disbursements projected by the IMF is rapidly decreasing. Despite the change in the debt profile, the risk of external financing remains.

Argentina began the year 2018 with a significantly overvalued exchange rate and a large current account deficit. Gradually stricter financing conditions and two cycles of sharp real depreciation have significantly reduced external vulnerability through the compression of imports. The reduction in imports until June 2019 reflected the trend of other emerging markets that experienced significant real depreciations. The recent depreciation of the peso will lead to a further decline in domestic demand and a compression of imports, which will make the cumulative reduction in external purchases since mid-2018 very significant compared to the historical. In this regard, they expect the current account to show a surplus over the next twelve months, which will reduce the need for external financing at the expense of economic growth.

The decision to extend the expiry of the short-term obligations of local legislation will reduce external amortization in the coming months because non-residents also have local law obligations. It is badumed that international obligations and long-term obligations under local laws are not redefined. Thus, lower external amortization due to the profile change will reduce non-resident cash outflows for any given reinvestment rate in the short term. However, Depreciated depreciation recovers in the first half of 2020, when larger capital outflows are likely to be observed relative to a scenario with no change in profile.

Despite the easing of the current account pressure and bond outflows of non-residents, Residents' capital flight could still be an excellent source of outflow, as was the case last year. In normal times, departures of residents in Argentina are not unusual by emerging standards, but they are recovering significantly in the run-up to almost every election.

Because residents' capital outflows are an order of magnitude higher than outflows of non-resident bonds, the IIF does not believe that changing the debt will change the picture of funding. outside.

Argentina has tightened its policies with the considerable support of the IMF (1,277% of its share of the Fund). Despite this, external financing conditions will remain difficult. Last year, capital outflows from residents were the main source of pressure on funding. And they believe that they will probably stay as they usually do during the pre-election period. It is that the change in the debt profile and the reduction in the current account deficit are easing the pressure on financing, while the disbursements forecast by the IMF are decreasing at the same time as the demand for external badets. by the residents is high.