The technical team of the International Monetary Fund continues to negotiate this week virtually with Economy officials, but there is still no news on the disbursement of at least US $ 10,000 million that the Government seeks to alleviate the dramatic fall in reserves.
A spokesman for the IMF said Monday that "IMF and Economy Ministry technicians continue to work constructively to strengthen the Fund-supported program in the context of the very severe drought."
"Discussions are ongoing virtually and the teams are expected to have several meetings this week to move forward with the program."
Almost a month ago, Minister Sergio Massa and the number two of the Fund, Gita Gopinath, agreed in Washington to review the original program signed by former Minister Martín Guzmán because it could not be fulfilled as it was. The severe drought that plagues the country was the cause mentioned to "put everything on the table" again, while reserves fell and inflation overflowed, two variables that still cannot be controlled.
Minister Massa is looking for a lifeline that will allow him to oxygenate the economy before the PASO and at the same time give him political support if he were to run as a candidate for the presidency for the Frente de Todos.
The Fund is ready to help, but it is not yet known how. More targets could be eased (they have already made the reserves more flexible, but they could even do so even more), postpone maturities and other maneuvers.
But the minister's greatest hope is that the Fund will advance the planned disbursements until the end of the year – which total around US $ 10,000 million – to be able to move with more tranquility and fresh money in the pre-election months.
The Fund, it is worth clarifying, has not said anything about what is being negotiated. He does not want the Argentine economy to explode, but he doubts to grant such a large sum of money at a time when there is a high possibility that it will quickly vanish in the heat of the elections. In addition, while the United States has given the green light for a modification of the program, other board members view Argentina's constant requests with suspicion.
Massa had planned to resolve the issue in two weeks, but time is stretching and there is no news. While negotiations remain online, it does not appear for now that the closure is imminent. The Argentine coaches were to come to Washington last week to sharpen the final details, but they traveled to Brazil to try a relief that did not work.
While the reserves continue to fall and negotiations continue, the minister specified these days some of the points that are agreed in the original program with the Fund: he applied the restructuring of electricity subsidies and raised the official dollar at the pace of inflation.
But, beyond the government's hurry, the new program is still undefined. Admittedly, it is not easy either: any variable that is touched on in the program involves recalibrating all the numbers, while the Argentine economy undergoes vertiginous changes every day.
SN
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