Lagarde met Dujovne, the volatile dollar in the background – 13/03/2019

The Minister of Economy, Nicolás Dujovne, met on Wednesday for 45 minutes in Washington with the Managing Director of the International Monetary Fund, Christine Lagarde, meeting in the middle of a meeting.economic panorama and when the agency must give the green light to a new disbursement of the loan.

Although funding sources have said Clarin that the subject of possible use of the treasury currencies to contain the rising dollar were not affected at the meeting, they pointed out that this issue was under discussion "At the technical level".

Dujovne's visit was "formal, pleasant and cordial between two people who have a very oily and confident relationship," they said. At this meeting, which started at 3:45 pm and ended at 4:30 pm, he was also present David Lipton, number two of the Fund, but no representative of the organization's technical team.

A spokesman for the Fund said the officials "had discussed recent economic developments and prospects for Argentina" and that "Lagarde commended the authorities for their efforts to promote their economic stabilization plan and to provide social protection to the most vulnerable population groups ". poor and vulnerable. The solid and continuous implementation The reform agenda of the authorities will be crucial in laying the foundations for a stable economy and sustainable growth. "

The meeting is held in a moment delicatewhen inflation does not reach the expected decline by the government and the IMF, the country risk increases, the growth does not appear yet, all in an election year. The dollar is very volatile and doubts about the effectiveness of the exchange rate fluctuation band this has been established in the agreement with the Fund. According to government estimates, the dollar can not be controlled and, in certain circumstances, with rising ratess Additional Treasury funds are needed. But this is specifically prohibited in the agreement with the agency, because in Washington, they do not see good eyes that the loan money has this destiny.

"We did not talk about that at the meeting, it's something the technical team is working on and that's must be reflected in the staff report"They said Hacienda. "We did not come to negotiate anything, we came to say hello and tell the state of progress of the program".

The staff report is the report that Roberto Cardarelli, the head of the mission of the Fund just arrived from Buenos Aires, should focus on the progress of the economy of our country, as well as the prospects offered by sectors other than the government, such as civil badociations , academics and opponents such as Roberto. Lavagna, Juan Manuel Urtubey and Axel Kicillof, with whom they had interviews. When the report is finalized, the Fund's board of directors is expected to badyze it in about two weeks in order to give free rein to the $ 10.7 billion disbursement of another installment of the Standby loan.

In the event of a change in the use of Treasury funds, this should be reflected in the Cardarelli Report and approved by the Board. Dujovne had already stated that "Argentina needs pesos. At some point, you do not know when, this will be defined in the technical part, "they said. Clarin. And they specified that the Treasury "also has dollars that do not come from the Fund" and that there are offers that can be converted into pesos.

So, could be marketed between $ 8,000 and $ 10 million this way between March and April until the fresh dollars come from the harvest.

Dujovne and Lagarde also spoke about the situation in Venezuela and worried about the crisis in that country and what needs to be done. Although the Fund has not officially recognized Juan Guaidó as acting president (a decision that should be approved by all member countries), the issue will be thoroughly examined at the IMF's spring meeting in Washington.

Immediately following the meeting with Lagarde, Dujovne also met with the US Treasury Secretary, Steven Mnuchin, with which he reviewed the progress of the Argentine economy and bilateral relations. Officials are listening and the American has repeatedly come to express the support of the Donald Trump government to the economic reforms undertaken by President Mauricio Macri as well as to the agreement signed with the Funds.

Dujovne's day had begun early with a private meeting with businessmen, officials and academics at the Center for Strategic International Studies (CSIS), a Washington think tank. As Clarín knew, there were representatives of the White House; from the office of Vice President Mike Pence; the State Department and Overseas Private Investment Corporation (OPIC), the US government's autonomous agency that seeks to promote investments in emerging markets. Also members of Washington's main badytical centers and businessmen interested in Argentina.

Dujovne then had a luncheon at the Inter-American Development Bank (IDB) with President Luis Alberto Moreno. As Clarín learned, the minister thanked the organization for his support and both spoke of the progress of the Argentine economy. Dujovne was upbeat and said they were seeing better numbers this year and that there would be a more stable economy. The minister also reviewed some polls and said he was confident that President Mauricio Macri was going to be reelected. "In an election year, what makes the difference, is to comply with what we propose.There is no better message for the markets than accounts in order," he said.

Before leaving on Thursday, he will meet David Malpbad, deputy secretary of the US Treasury, appointed by Trump as a presidential candidate for the World Bank.