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By the way, and whenever the health situation permits, the president he plans to visit France in June to meet his French counterpart.
After renegotiating the debt with private bondholders, the country settled its short-term maturities with these creditors. However, this year there will be over US $ 10 billion of debt due from international credit institutions (5.1 billion with the International Monetary Fund, 2,400 million with the Paris Club and 2,900 million with the rest of the organizations).
Faced with these commitments, Argentina faces a situation of reserve shortage that make payments difficult. The Central Bank’s net reserves are around US $ 4,000 million, according to various estimates from private consultants.
The government got two good news this week. On this subject, the President himself had a dialogue Wednesday with the head of the World Bank, David Malpass, where he confirmed that the entity will finance projects in the country for 2,000 million dollars.
On the other, the Managing Director of the International Monetary Fund, Kristalina Giorgieva, announced that the agency plans to increase its capital by US $ 650,000 million (Special Drawing Rights (DEG)). Concretely, this would make it possible to income greater than US $ 4,355 million to the country’s foreign exchange reserves.
This news was greeted with satisfaction at Casa Rosada, but it is presented a problem of time. The expansion of SDRs will not be reviewed by the Fund’s board until June and will then need to be approved by the majority of member countries.
In other words, this strengthening of the country’s foreign exchange reserves would occur after the expiration of the payment to the Paris Club, hence the aspiration for an extension.
No deviation
“Alberto and Cristina see each other at least once a week and talk to each other all the time”, affirmed to Scope an important collaborator of the president.
The president and his vice-president, Cristina Fernández de Kirchner, agree on the negotiation strategy for the external debt. Precisely on Wednesday the vice-president stressed, about the negotiations with the IMF, that “We must make an effort, the party in power and the opposition, so that they give us a longer term and a different rate. ‘interest on a debt that others incurred. “
The president and vice-president agree that Argentina must have a longer term and lower interest rates to honor its commitments, especially in the context of the emergency derived from the pandemic. They also insist that these are debts that this government has not assumed.
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In front of all
Either way, get an extension of payment terms at the IMF it is not an easy task. The agency has structured its loans for a maximum duration of 10 years (extended facility program). A decision in this direction must come from a political action of the member countries, then be studied and approved by the technical staff and approved by the member countries in general, since the IMF does not grant loans adapted to the candidates.
Also on Wednesday was Argentina’s decision to leave the Lima Group (created to seek a peaceful solution to the crisis in Venezuela), a resolution that some sectors interpreted as a distancing from US interests. The government denies this version and confines itself to reporting that “this group has long ceased to be operational”.
“The important thing is to keep in mind that Guzmán works closely and in coordination with Alberto (Fernández) ”they maintain in the Casa Rosada. In other words, the Minister of Economy is aware of the president’s decisions that affect his management and – they claim – there is no disagreement on how to negotiate the external debt.
In the presidential environment, they are referred to as “Positive” the conversations that the chef of the Palacio de Hacienda had with Giorgieva, and adds (without giving details) that “All the objectives have been achieved” that was on the agenda for that meeting.
Washington sources, meanwhile, argue that during the meeting, Minister Guzmán bluntly said that “The political situation in Argentina makes it difficult to approve a program that does not include a longer term”.
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