The economic program in "breaking point"

It has been reached the "break point" of an economic program. This happens when none of the measures taken is sufficient to contain the escalation of relevant variables of the economy: exchange rate, price and interest rate. It is clear that neither the sale of the reserves of the Central Bank nor the increase of the reference rate of monetary instruments constitutes an obstacle to Argentine financial badets.

Essentially because economic agents perceive the exhaustion of the current design, distressed by the unsustainability of its over-demanded external sector and nothing, and as a result, they anticipate the arrival of a new regime that ensures the viability of the economy.

The first factor that validates the "rupture" of the actions undertaken under Cambiemos's government and the transition to another scenario is the announcement of the restructuring of the public debt of short and long term made by the minister Hernán Lacunza yesterday afternoon.

The government proposes to extend the time limits without removing or changing the remuneration of the securities. Although it wanted to be presented as a simple "carry forward" of outstanding debt to improve its profile, the facts show that this occurs in a context where sovereign bonds are quoted at "default" prices, country risk exceeded 2,100 basis points and the call for bids to renew short-term treasury bills (LeTes) It has been declared desert.

The economic team's exposure lacked projections about the future evolution of the external sector and the timing of the new deadlines that they hoped to obtain when restructuring the debt. This uncertainty is capitalized when submitting an offer to bondholders because it defines the state's ability to pay.

However, the omission is not accidental because it would be More sincere the gigantic failure of the government and its main "sponsor": the IMF.

A president who boasted from the beginning of "raining dollars" for Argentina because of its policy of promoting markets, and a multilateral agency that helped the government to pay 45 billion US dollars (unpublished amount for institution itself) in order to stabilize the economy and eliminate the risk of default of the significant debt incurred during the 2016-2017 biennium, they are now the unbridled economy and posing the restructuring of the stock of liabilities taken a few years ago. Many shared responsibility to ignore in the future.

There is an additional element in this daily slippage to which the people of Argentina are subjected by the government of President Macri: given the insufficiency of the foreign currency reserves of the private sector and kept for the moment the contribution of the IMF , the way the authorities have found The economic solution to solving the foreign exchange market tensions was to remove the demand for dollars to deal with debt payments, especially short-term liabilities (LeTes). As a result, the Central Bank may continue to sell international reserves to other claimants, leaving sovereign debt holders to one side.

Argentina is not only plunged into an uncertain debt restructuring process, I decided suddenly but The drainage of BCRA reserves will continue finance the financial recovery.

This, yes, let's all be silent about governance.