IMF $ 3 Million Turns Will Help Keep Peace With Dollar In The Countryside

WASHINGTON.- The International Monetary Fund (

MFIs

) is preparing to release, before the end of the month, about 10.8 billion US dollars in favor of Argentina, the largest disbursement this year and the second among the most important of all agreements of confirmation signed the previous year, which expires in 2021. Before the elections, there will be two other rounds, in June and September, amounting to about $ 5,400 million each.

With these three disbursements, the government can count on a "cushion" of more than $ 21,000 million before the elections, which is vital for the budget and maintaining the exchange rate during the campaign. To this will be added the collected dollars.

The stability of the dollar, interpreted here by those who follow Argentina, became the main economic obsession of Casa Rosada until the elections, even at the cost of an increased recession. With little prospect of tangible improvement in growth or inflation before October, the priority is to avoid another slippage. In government, they are in the fund. For this strategy – political rather than economic – Fund funds are essential.

There is however a "technical" obstacle preventing the Treasury from controlling the exchange rate. The Treasury has to use the IMF's dollars for the budget and the debt. He can not intervene in the foreign exchange market. This function is the exclusive power of the Central Bank and that is what is written in the agreement with the IMF. Public banks can not intervene either.

The Treasury, however, must sell the Fund's dollars to pay the fees in pesos. The scheme under which these dollars will be sold is closed – Roberto Cardarelli has tweaked it during his last mission to Buenos Aires – and will be announced, almost certainly, in the next IMF IMF report on Argentina , which will be known when the board of directors approves the next disbursement, before the end of the month. The government has already announced that there would surely be a daily auction system.

Once the three projects have been received before the elections, the Fund will have already given Argentina under the government of Mauricio Macri some $ 50,000 million, almost the entire loan provided in the stand-by arrangement. This, even before the government shows that it has reached the "zero deficit".

No one here anticipates that this month's shift or June or September disbursements will be threatened, let alone this year, it is necessary to discuss with the Fund a "waiver" – a derogation from 39 a program goal – with the exception of a few unforeseen. through. All turns must first go through the bureaucratic filter of the board. But for this to happen, the most important thing is the achievement of the program's goals.

For the June turnaround, the government needs a $ 6 billion primary surplus at the end of the first quarter; for the September recovery, a surplus of $ 40,000 million at the end of the first half, according to the agreement. In January, the government had already achieved a primary surplus of nearly $ 17 billion. The collection evolved into the projections of the agreement.

The government has only recently shown the Fund that it achieved this goal in early 2020, when Cardarelli is expected to travel to Buenos Aires to check out this year's tax break. The government can even go beyond this target by using the margin already provided for in the $ 37,000 million social spending agreement, which is about 0.4% of gross domestic product (GDP).

Of course, by then, Cardarelli could end up with a new government and renegotiation at the door.