net reserves reach just 25,000 million USD

International reserves of the Central Bank reached 77 478 million USD this Tuesday, after the entry of 10 835 million USD corresponding to a new disbursement of the International Monetary Fund.

"The income corresponding to the fourth installment of" Stand By "credit has been registered with the International Monetary Fund for an amount equivalent to $ 10,835 million," reported the monetary authority.

However, it is a figure on which one must be cautious. Much of this total is already committed to pay debts maturing in the coming months and the Treasury sells foreign exchange on the foreign exchange market to control the price of the dollar.

Behind this record amount, there is another somewhat more stringent concept, namely net international reserves (RIN), a value jointly controlled by the IMF and the Argentine government.

According to the calculations of Proficio Investment, a consultant led by Alejandro Henke, the level of net reserves is only $ 25 billion, a third of the total.

The remainder, more than USD 50,000 million, is short-term or medium-term loans that will have to be repaid; and dollars that do not belong to the central, but to the savers who deposit fixed amounts in foreign currency in the banks and that the entities fail to lend to the exporters.

This means that the level of net reserves is only one-third of the total reported daily by the Central Bank. This explains why the IMF is so jealous of taking care of it and allows the BCRA to sell and sell only if the quotation exceeds the exchange rate band ceiling.

After the Fund's Board of Directors approved last Friday the third revision of the confirmation agreement with Argentina and authorized the disbursement of 10 800 million US dollars, he asked the government to reinforce the "caution" of public spending and warned that "have disappointed" the measures against inflation.

How are net reserves calculated by the central bank

The gross stock published by the Central Bank on its website must be deducted from the exchange of currencies with China and the Basel International Bank (approximately $ 22,000 million); In addition, some US $ 14,000 million deposited by banks into the current account of BCRA (corresponding to the dollar deposit reserve of private investors, are determined by the difference between deposits and foreign currency borrowings).

"Repo", short-term loans from private banks, are also subtracted from gross reserves announced daily by the Central Bank, as well as the balance of withdrawals from the IMF not used to pay the installments of the public debt.

The spirit of the agreement with the IMF is that the dollar is still very close to or below the floor of the exchange band. This would allow the plant to accumulate "net" reserves. But mistrust has distanced the price of the lower level.

Lagarde praises and criticizes Macri's government

In a statement, the CEO of the Fund, Christine Lagarde, presented laudable concepts to the leadership of President Mauricio Macri, but warned of the vulnerabilities that the country faces and called a "priority" the helping the most vulnerable sectors.

"The policies of the (Argentine) authorities behind the agreement are bearing fruit," Lagarde said in a statement in support of the revision's approval, adding that "there are indications that the recession has bottomed out and that a recovery is expected … gradual in the coming quarters "

However, the official felt that "Inflation expectations rise and inflationary inertia is difficult to break"

"After a few months of relative stability, financial volatility has rebounded in recent weeks as the global financial situation has become less favorable and the results in terms of inflation disappointing," he warned.

He added that "the high budget deficits and the current account, two important vulnerabilities that led to the financial crisis last year, are decreasing".

In his statement, the agency announced the conclusion of the third review of Argentina's economic development as part of the 36-month confirmation agreement approved on June 20, 2018.

That way, we allow a rotation of about $ 10,800 million – those received on Tuesday – and so on Total disbursements reached US $ 38.9 billion against a global agreement of US $ 57.6 billion.

In the statement, Lagarde said: "The success of the authorities' political plans depends on continued and resolute implementation."

"This will require broad support for policies that mitigate economic vulnerabilities, increase Argentina's growth potential and enhance market confidence," he said.

The agency also warned against the decline in tax collection and said that "it is necessary to redouble efforts to improve the medium-term fiscal framework and the management of debt ".

Lagarde has referred to the Central Bank and baderted that the entity "reacted by recalibrating its monetary policy, maintaining zero growth of the monetary base until the end of the year." year".

Dujovne and Sandleris, Washington

Finance Minister Nicolás Dujovne and Argentine Central Bank President Guido Sandleris will start this Wednesday in Washington. a program of activities including private meetings with potential investors, while participating in the Spring Annual Meeting of the International Monetary Fund (IMF) and the World Bank (World Bank).

Sandleris will be Wednesday speaker at the event organized by the Council of the Americas.

According to the official agenda, Minister Dujovne will start meetings with investors on Thursday with the Central Bank President. These are private meetings organized by financial institutions that seek to open the door to potential investments in Argentina.

Thursday's Sandleris activity ends with participation in the first G20 meeting on the global economy and a meeting with David Lipton, IMF's first Deputy Director General.

Ministry sources confirmed that The agenda of Dujvone for Thursday is completed by a working dinner with representatives of the G20.

Dujovne will hold a meeting Friday with member countries of the International Monetary Fund, another meeting with those of the G20 and bilateral meetings with their counterparts from Brazil and Saudi Arabia. and for Saturday, the meeting with the first Deputy Managing Director of the IMF, David Lipton, stands out.

At the same time, Sandleris will participate in the second G20 session and complete its activities with a bilateral meeting with Queen Máxima of the Netherlands. Later, it will be the same with the member countries of the IMF, meetings that will continue Saturday.

Dujovne will participate on Sunday in the "Tax Forum: Promoting Investment in People and Infrastructure", which will be led by Financial Times Editor-in-Chief Gillian Tett and Christine Lagarde, IMF Director; Gloria Alonso, Director of the Department of National Planning of Colombia; Paschal Donohoe, Irish Minister of Finance, Public Expenditure and Reform, and Vera Songwe, Executive Secretary of the United Nations Economic Commission for Africa.

The World Bank Group (WBG) and International Monetary Fund (IMF) Spring Meetings are meetings to discuss issues of global concern, including global economic prospects, poverty eradication, economic development and the effectiveness of the measures taken. l & # 39; help.

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