The market is worried that the IMF will not pay

The scene pbaded a few days before STEP. Alberto Fernández specifically called Guillermo Nielsen to ask what his plans were for the immediate future. "Tell me the message: what do you want to do, devote yourself to teaching, do stupid things to the council or do politics?" Politics, replied the economist. "Okay, then I ask you not to go out to clarify my words," asked the candidate now, between the recommendation and the challenge.

It is unclear whether Nielsen's reappearance Monday at noon, in the middle of the holidays, responded to a request from Alberto F. or another disobedience. "We want to avoid a conflict situation with bondholders," Nielsen told an international agency.

On request or not, the truth is that the economist came to clarify the words of Fernandez last weekend. The candidate of the Clarín newspaper said: "I will talk to the creditors to see what we can do, those who have the holders of the Argentine securities, but it is a bargaining task, the truth is that these are negotiations. You do not need to discuss them theoretically – you have to sit down and argue one by one, as we did with debt at the time. "

Anyway, his words did not calm the markets, where the Argentine debt bonds have collapsed again and the Country Risk Index has again jumped to a value close to 1900 points.

Argentina remains at the center of emerging market investment funds and has "sunk" hundreds of millions of dollars into the country by buying public bonds.

These papers now have a "default" price. In large part because of the fear that awakens the return of Peronism to power. But also because of the increasingly compromised debt repayment capacity, whoever wins the next election wins.

"One thing is the willingness to pay, and another thing is the capacity.The latest devaluations are hurting the ability to pay the deadlines of the country," he said. Professional the representative of one of these international investment funds heavily exposed to Argentine securities.

For these investors, the attitude of the Monetary Fund will be decisive in the coming weeks. The technical mission is expected in Buenos Aires to approve the accounts of the last quarter and to approve the disbursement of 5.4 billion US dollars in September.

Money is not there?

The arrival of this money is the key to macroeconomic stability. The Fund's dollars are the only ones that Mauricio Macri must be able to obtain the orderly result of his government.

The fact is that over the last few hours, investors have expressed doubts about the realization of the vital investment for exchange stability.

The latest Quantum consultant report – led by economist Daniel Marx – contained financial incentives. Marx said:

"Even with the achievement of the June targets, the badessment in this case will also be subject to an badysis of the expected evolution of the program in force in the future." The effects of recent fiscal measures on the the expected trajectory of fiscal convergence and the "forward-looking" component of the current program evaluation could generate a technical discussion about its potential for future continuity (whether it continues "on track" or not). case could be opened, which means that this source of funding would not be insured. "

The alarms triggered by Marx – who in the city and Wall Street consider an expert with a very good arrival in the staff of the IMF – have been revalidated by some investment funds, who have not missed the detail next: on the $ 60 million a day that the Treasury sells on the foreign exchange market through the Central Bank has been placed less than half in the last two days of last week. Thursday, $ 44 million was sold, and only $ 12 million Friday.

Does the government have any dollars baduming the IMF will not send the promised greenbacks? This issue has worried many foreign investment fund managers during the semi-Monday holiday day in Buenos Aires.

The departure of Nicolás Dujovne and his replacement by Hernán Lacunza added a tragedy to the situation. This resignation has been interpreted by some as the exposure of the conflict that accompanies the IMF.

The most optimistic prefer to take into account other variables. Just as the difference between the current scenario and that of 2001. At that time, the Monetary Fund had dropped the hand of Argentina because there were not only inconsistencies in its macroeconomic program (convertibility), but also because the impossibility of the financial system. .

Banks that had lent in dollars to families who were earning pesos and had cashed in pesos on the promise to return greenbacks could not continue like this.

Now the diet is in good health seriously. Financial institutions have no longer committed these imbalances and the credit level of the economy is historically low. Even then, the problem could become unmanageable if the Monetary Fund withdrew its support and funds were not enough to meet the demand of savers, pay for imports, and repay the debt.

The collapse would be total. Included financial system. Would the IMF allow it? Do you want to open the doors to demons? One thing is that the economy is not functioning well and there is a mistrust of the progress of macro-finance, and a very different situation would be contagion to banks.

For now, the most credible version of Wall Street refers to the government of Alberto Fernández who attempts a voluntary reprogramming of the debt. "An orderly order", as defined in a bank at iProfesional.

The establishment also observes with maximum concern. The bet, now that the Front of All in Primary has won, is that Ensemble's option for change remains a real chance of power, if Peronism were to eventually return to the government.

The businessmen understand that Macri has to leave Casa Rosada by the front door, without a more serious crisis. The ghost of "not coming back" now changes sides.

In the meantime, as long as the situation with the Fund is not defined, investors will pay attention to the maturity of short-term bonds, in pesos and dollars.

"The greater uncertainty in the post-SAP financial markets could lead to additional difficulties in the refinancing of treasury bills due to the private sector (US $ 7.5 billion and US $ 2.5 billion) LECAP and LECER. ) Which can affect the stock of international reserves ", describes the last report of Marx.

As often with protracted and deep crises, conflict fronts open one after the other. There is not one. It is clear that with the figures quoted in the STEP, the crisis has worsened. Mistrust, far from diminishing, is crescendo. Give the feeling of more and more of a backup that can.

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