Negotiations with the IMF to loosen the requirements on reserves established in last year's agreement represent a relief for the government.
The official expectation is that the change in goals will reduce the pressure to comply with the program and make it possible to continue receiving dollars from the agency to ease tensions prior to the elections.
However,
making the agreement more flexible does not solve the underlying problem of the lack of foreign currency,
which will continue to condition the economy.
This weekend it was announced that an agreement was reached with the IMF to make the net reserve goals more flexible, which meant that the Central Bank
had to count US$7.7 billion by the end of March, when it is at least US$3.5 billion below.
Between Monday and Tuesday the body will make this change official, which gives the government oxygen in the short term and avoids the political coup of requesting a "waiver" for failing to meet the goals.
Faced with the exchange rate gap and the impact of the drought, the Government will have to look for other sources to prop up the reserves.
For this reason, the alternatives in question are a REPO credit with foreign banks for
US$ 1,000 million
, seeking funds in multilateral organizations such as the recent disbursement from the World Bank or new transfers from the IDB, and launching a soybean dollar 3. The swap with China and Financing from Brazil is also on the radar.
Negative balance
The data from the exchange market is worrying: the Central Bank started 2023 with
the worst result in almost 20 years
.
Last Friday it sold almost US$30 million and ran six consecutive weeks in the red, accumulating
a negative balance of US$1.13 billion for the year,
in its worst start since 2003. "As a result, net reserves under the methodology of the IMF show a fall of more than US$ 5,000 million in the year", estimated Ecolatina.
Already in January, the Government raised the rate of passive repos and repurchased debt in dollars with reserves to contain the pressures on the parallels.
The measures moderated the exchange gap, but
the lack of foreign currency was exacerbated by the meager liquidation of agriculture
, as a result of the impact of the drought on the wheat harvest, the advance of exports in December and the incentive of the sector to withhold while waiting for a favorable exchange rate.
"Ask them to adjust the reserve goal and manage not to make net payments to the Fund and that some of the swap with China is activated, there is a REPO and scraping the bottom of the pot gives them to reach the end of the year, the situation is
equally imbalance due to the natural tendency to deaccumulate reserves given the official exchange rate and the high exchange rate gap
," said Carlos Pérez, coordinating technical director of Fundación Capital, which he co-founded with Martín Redrado.
In the midst of the negotiations in Washington, Minister Sergio Massa suggested possible changes in goals by assuring that "
the consensus with the IMF is that it is better to adapt the work schedule for the year from the beginning to provide predictability
and not have to make waivers during year".
And in his team they maintain that "the idea is that the reserves continue to accumulate and grow, but taking into account the drought and the war."
For the time being, the drop in activity for the fourth consecutive month in December and the drop in exports in January mark an increasingly noticeable deterioration.
"The BCRA will have to decide whether to sell the few reserves it has left (US$ 4.2 billion; and if it does not want to, it will have to further adjust imports with the SIRA, further worsening activity, putting more pressure on the parallel dollar and on inflation," noted an FMyA report.
When looking at the "box" that arises from estimating the income and expenditure of dollars,
economists expect a red of between US$6,000 and US$10,000 million this year
.
Until 10 days ago, the exchange of goods compensated the deficit in services and the payment of private commercial debt.
But the frost in soybeans added a stress factor to the expected currency outflow due to debt with private bondholders and a change in IMF flows in 2023.
It happens that from the end of March, when Argentina receives US$ 5,300 million for meeting the December goals, the country will begin to face "net payments" with the agency.
Thus, even if the quantitative objectives are met, the Fund's disbursements will no longer be enough to cover capital maturities, as happened in 2022.
And interest will have to be added, which will amount to US$ 2,900 million
.
The exchange rate will be another challenge.
The BCRA accelerated the rise of the official dollar to an average of 6.2% per month, above the 5.1% average for January and in line with the inflation forecast for February, but it would not be enough.
"It will be a difficult year to go through if the exchange rate policy is not corrected
, they will manage a constant shortage
and even if they soften the target, we will experience consequences of the soybean dollar every time there is a review," said Matías de Luca, of GCL.
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