Agreement between the IMF and Casa Rosada to use the reserves of the Central Bank – 05/09/2019

Mansalva attack at Congress generated this Thursday a great concern in all the power factors of Argentina. In the Industrial Union and the Association of Banks, he was only qualified in one way: very serious. Miguel Pichetto has clearly defined the collective feeling: "Argentina returns to dance with its worst ghosts of the past". The markets did not have cimbronazo. The confidential information processed by the financiers linked the attack – from the beginning – to a mafia vendetta against the mortal victim and not to a political coup by radical Héctor Olivares.

There was a slight currency adjustment, but the result of international instability. Donald Trump's explicit political support to the President served as a balm against the turbulence themselves that the White House generates in its fight against China.

The dialogue between the two presidents was the result of an intense Washington intervention, twist your arm IMF technicians and managers. Clarin He anticipated that it was a direct order from the White House that forced the IMF to change its dogmas and precepts and allow BCRA's intervention in the market. exchange.

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The fall of the Fund's technicians generated a strong internal reaction in the body. Alejandro Werner and Roberto Cardarelli were tenaciously opposed to the changes. But they had to forget their beliefs when they received the directive from David Lipton.

The discomfort was reflected in the totally irregular procedure that was used to approve the change – in short – the agreement with Argentina. Staff failed to produce a regular and mandatory report, and informal notification to the Board was finalized without a meeting in front of its directors. The reaction of the technocrats obeys a fear installed in Washington: all are subject to internal review of their decisions. Packiaraj Murugan is Director of the IMF 's Office of Internal Audit and Inspection.

They state that it would have been decided to badess whether the Fund's managers had complied with the internal rules when they left the Central Bank free. To cover themselves, the Werner-Caldarelli duo would have demanded from Guido Sandleris a series of fierce demands allowing the BCRA to intervene in the market. In Washington, it is said that the BCRA can sell on the market:

• When the local devaluation overtakes the devaluation in emerging markets at several times.
• There is an unwritten intervention ceiling that would be less than 250 million US dollars a day.
• The decision to intervene will be ad referendum of prior consultation with the IMF.

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Among the bankers, there is confidential information Trump would be ready to increase lending in case the Casa Rosada continues without being on the markets.

The intention to send new funds has always been evaluated in the event that Macri is re-elected. This would be to ensure payment of the high maturities of 2020. But now, an expansion of funds is not excluded, even if exchange rate instability returns in winter. On Wall Street warn of potential turbulence after confirmation of applications – 22 June – and until the elections of October. He is also admitted to the intimate meetings of Casa Rosada: this could be a "possible scenario".

The leaders of the Council of the Americas received a report from FIEL on the progress of the economy: its main economists exposed a few weeks ago fleshy panorama. Surveys also circulate in Manhattan – under contract with investment funds. whose results are not conducive to change.

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These are reports in which the interviewers speak more clearly than the work they do in Buenos Aires. That's why the public conversation between Trump and Macri came. The political message they both conveyed was clear: the White House is providing off-road political support to Macri. In other words, he will not let the president be affected by another monetary storm.

Macri himself, last September, explored direct financial support from the White House. There are two types of these loans. First, it can be disbursed by the Federal Reserve for up to $ 20,000 million. The other: a US Treasury tour, without congressional intervention. Bill Clinton executed it in 1994, in favor of faltering Mexico.

Steve Mnuchin – Treasury Secretary – last spring ceased any direct support and channeled everything to the IMF. This direct help was reserved, for an exception.

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The question is related to the versions on the actual level of reserves of the BCRA. Free availability funds they would be around $ 20,000 million. Several experts say that the figure is lower, because the Treasury is now faced with important external commitments.

This is an amount at the limit of what is adequate, but only to the extent that the BCRA does not suffer from market attack. Businessmen evaluate the complicated situation.

This week was held a meeting of ten "popes" of construction. The panorama coincides: freefall and expulsion per month of 10,000 workers. At the UIA, they confirm that the industry is on a slide. There are meetings and a decision taken: Miguel Acevedo will be re-elected in June as "Jefe" of the industrialists.