the intervention plan on the dollar market

A nervous financial market was waiting for signals as to whether the government would intervene directly to ease the volatility of the dollar. And the meeting of the Minister of Finance, Nicolás Dujovne, with the number one of the International Monetary Fund, Christine Lagarde, seemed the opportunity to see more details in this regard.

The spokesman for the minister tried to calm the tone of the meeting held Wednesday afternoon in Washington. They called it a formal event before the US $ 10,700 million payout that the agency will pay, after the Fund's staff has proceeded to badess the case of the l & # 39; 39; Argentina.

According to Treasury spokespeople consulted in this way, "there was no mention of the dollar" or the possibility for the Treasury to initiate the expected foreign exchange offers to eventually intervene in the market. exchange.

This does not mean, however, that, at the same time, no progress has been made in defining the new greenback mechanism.

In fact, after the meeting, the Central Bank reached the agreement. "It was a formality that Nicholas's trip (Dujovne) .The scheme is already more or less accepted," he said. iProfessionnel a high source of the BCRA.

In fact, although he does not want to advance on the definitions that the Ministry of Finance will give later, the same source adds: "The confirmation of the scheme of sale of dollars should be very good news for the market."

What would the schema look like? The Central Bank will auction Treasury dollars, which will be reported at the time "neat" and open to the market, at the request of the IMF. The BCRA is the financial agent of the government, with whom the sale of foreign currency must obligatorily go through the sale of foreign currency.

This will be very similar to the interventions that had been made in the past when Luis Caputo had sold the borrowed proceeds of the Fund he had administered to Dujovne. However, on this occasion, they will not be able to "cut themselves off" like the old Deutsche Bank did.

Although it has not extended the amount, which will surely be what must be defined, in the plant, they believe it will be relevant enough to dispel doubts about the official supply capacity of the market.

In the midst of rising exchange rate pressures and financial market doubts about economic policy, Dujovne badured that the details would be handled by the technical teams on both sides.

The Minister of Finance has already publicly announced that this chart, which would represent between $ 8,000 and $ 10 billion, would be put in place in the short term. But he did not specify the time nor the terms in which it would take place. Will it be in May? These data are what is waiting with anxiety.

But the meeting with Lagarde was not the only reason we had to continue to solve the problem of selling dollars. In front of Lagarde, Dujovne, for 45 minutes, gave details on the evolution of macroeconomics. And insisted that "December was the floor of the recession" and that the rest of the year would see positive signs of activity.

After the meeting, Lagarde said on his Twitter account: "It was a pleasure to receive @NicoDujovne.We had a good conversation on the recent economic developments in # Argentina.Solid and continuous implementation of the reform program of the authorities will be crucial for a stable and sustainable growth economy. "

It was a pleasure to meet @NicoDujovne at the IMF. We had a good discussion on recent economic developments in #Argentina. Continued vigorous implementation of the authorities' reform agenda will be crucial for a stable economy and sustainable growth. pic.twitter.com/KuMXYeDoZV

– Christine Lagarde (@Lagarde) March 13, 2019

Dujovne also met with US Treasury Secretary Steven Mnuchin, who played a key role last year in providing Argentina with access to a pending IMF loan of around $ 56 million. $ 7 billion. And with IDB leader Luis Alberto Moreno.

The meeting with the IMF representatives was made when the agency has to badyze the disbursement of a new tranche of $ 10,700 million of the stand-by loan agreed last year.

Last Friday, the fund's representative in the country, Trevor Alleyne, estimated that the dollar's rise was due to the fact that "Argentina is weaker than other emerging countries"

"Therefore, he must have this policy and this program (from the IMF) to try to strengthen all aspects of macroeconomics and strengthen resistance to the outside," he added.

After the IMF visit, Dujovne plans to speak at the International Strategy and Research Center (ISSC) before leading US government officials and academics studying the reality of Latin America .

Representatives of investment companies such as Citi, JPMorgan and oil companies operating in the country, such as Chevron, Exxon Mobile and Shell, among others, are also invited to this meeting.

The Minister will insist, as he has already said, so that Argentina "the situation is much better than in 2015. The past year has been a difficult year for many families and businesses, but we have started laying the foundation for sustainable growth. and be able to develop our full potential. "

He will be able to show the figures relating to the achievement of the objectives of the monetary base agreed by the Central Bank with the IMF, as well as the sharp reduction in the budget deficit achieved by the government, whose official figures will be released Friday.

Before his return, the minister will meet Thursday with US Deputy Secretary of the Treasury, David Malpbad, proposed by US President Donald Trump, to the presidency of the World Bank, one of the main sources of funding for the United States. country. public works that the country has.

Dead Cow: all guests

Dujovne arrived in the United States on Monday with the Secretary of State for Energy, Gustavo Lopetegui, to participate in a business forum of the oil sector that takes place every year in the United States. the city of Houston, Texas.

On Tuesday, they met with US Secretary of Energy Rick Perry. Argentine officials gave details referring to the latest initiatives taken by the Argentine government for energy development, said a statement on finance.

Dujovne and Lopetegui notably mentioned the public consultation launched for the construction of a new gas pipeline in Neuquén and the RIG program (Gas Import Import).

Officials also discussed the investment projects of North American companies in Argentina, both in Neuquén oil formation of Vaca Muerta and in renewable energies.

Previously, they invited oil entrepreneurs to invest in Argentina, ensuring that this country lays the foundation for "sustainable growth" in the years to come.

In the company of Lopetegui, Dujovne organized a meeting in Houston, Texas, with about 120 energy entrepreneurs, at a meeting organized by the Argentine Institute of Oil and Gas (IAPG).

There, the Minister and the Secretary of Energy presented investment opportunities in Argentina for more than $ 33 billion.

"As President (Mauricio) Macri said, the situation in Argentina is much better than in 2015. Last year was difficult for many families and businesses, but we started laying the foundation for sustainable development and all of our potential business, "Dujovne said.

The Ministry of Finance reported on the meeting in a statement detailing the "CERAWeek", an annual meeting of leading oil entrepreneurs.

Representatives from Exxon Mobil, Chevron, Total, Shell, YPF, Pluspetrol, BP, Tecpetrol, Panamerican Energy and Schlumberger, among others, took part in the luncheon.

Lopetegui explained that investments in oil and gas require US $ 10 billion; $ 8,200 million in infrastructure; US $ 12 billion in electricity and renewable energy; and US $ 3 million for access to new markets.

He notably recalled that the call for tenders will be awarded next August for the construction of a new gas pipeline linking Vaca Muerta to the city of Buenos Aires and to the coastal region, with an estimated investment in approximately 1,500 million US dollars.

In addition, the government launched a call for public consultation last Friday to set up a program for replacing gas imports (RIG) through an auction whose base price will be equivalent to the price at the time of the auction. Import of liquefied natural gas (LNG), with top of 8 dollars and discounts that increase over the years.

Lopetegui underlined "the success we are seeing in Vaca Muerta, which already accounts for about 20% of oil production and 40% of gas production, and this is just the tip of the iceberg, we do not exploit only 4% of the total area ".

The Energy Secretary explained that "to continue on this growth path of investment and production, we must continue to work at the Vaca Muerta table with employers, unions and the provincial government. ".

As for the gas market, it has made a brief evolution of the main variables in recent years.

"Between 2005 and 2015, exports and local production were systematically replaced, with prices reaching a floor of US $ 1.9 per million BTU in 2012 due to the import of liquefied natural gas at around US $ 8. per million BTUs, "he said.

He recalled that "in 2015, gas imports had exceeded 25% of the total injected and that" in 2016, we managed to change the trend ".

"This year, we will supply more than 85% of local production and, at the same time, we will have started exporting again," he concluded.

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