Waiting for the IMF, Massa travels to China over the weekend in search of financial help

Amid tough negotiations with the IMF and a tightening of the exchange rate trap, the government will travel to China over the weekend to try to alleviate the shortage of dollars. A delegation headed by Economy Minister Sergio Massa will seek to unlock financing from Brazil and achieve greater availability of yuan for the payment of imports through the swap with the Asian country.

Massa was invited to the annual meeting convened by the BRICS bank in Shanghai on May 30-31 to discuss amending the financial institution's charter to support financing Brazil's exports to Argentina. Lula Da Silva began these efforts in April after Alberto Fernández's visit to the neighboring country, from where he returned "without money," according to Lula.

The agenda includes a stopover in Beijing and negotiating an increase in the use of enabled yuan in bilateral trade. "The swap is $18 billion, the expansion was from $000 billion to $1 billion that could be used and that we are actually using. And the expansion we are negotiating is to increase the capacity of use, not to expand the swap, "said sources from the Ministry of Economy.

According to official data, the government authorized yuan imports to China for $1.700 billion in the year, nearly a third of the $5 billion authorized by China. The idea now is to raise the amount to $000 billion, although its impact so far is limited. Strictly speaking, banks continue to study its implementation and since January, imports with Chinese currency for only US $ 9 million have been effectively paid.

Argentina and China are paying for their respective imports with yuan and pesos. Photo Xinhua

China encourages swaps with its currency so that the yuan becomes an international currency, even within the IMF. On the other hand, Argentine companies seek to advance imports in the expectation of a devaluation and an exchange rate gap of more than 110%. And the government tries to avoid the use of dollars. But the loan is not free: it implies a financial cost of up to 9.5% per year, which in the long run is paid with dollars.

Massa invited Maximo Kirchner to the mission to China and in the environment of the son of the vice president believe that "it is possible" that he participates. The entourage will leave in a few days.

No sign from the IMF

The trip will take place amid a lack of signals from the Fund to release the planned June disbursement of $4 billion and an advance of another $000 billion for 6. Massa's team is betting on fresh funding by the end of June, once the review of the agreement is concluded in the face of the failure to meet most goals. It also negotiates how many dollars it can use to intervene in the financial market and contain the dollar.

"It seeks to rediscuss an agreement with the IMF that in practice was never fulfilled, in the search for funds in the context of the severe drought, although conditionalities continue to hinder progress. The June-August quarter is complex in terms of foreign exchange, where net payments of about US $ 2,000 million will have to be faced with the agency and, in addition, an additional US $ 1,000 million with private bondholders, "said the Capital Foundation.

In recent days, the Government ordered new obstacles for the purchase of assets with MEP dollars and adjusted the clamp to imports with restrictions on the payment of freight abroad. It also notified fuel importers that there will be delays in accessing dollars. All this in a context where the Central Bank bought foreign currency in the last two weeks, but lost more than US $ 1,000 million by intervening the CCL and MEP dollar.

"Keeping the exchange rate gap contained is an essential part of the 'Massa plan' and a transversal challenge to the 'Dollar front', the 'Peso front' and the 'Price front': currently, a jump in parallel dollars filters inflation more easily (we already saw some impact on April's numbers and will probably also impact May) and increases expectations of devaluation, further reducing the net supply of foreign exchange," Ecolatina said.

NE

See also

Sergio Massa surprised and takes Maximo Kirchner on his trip to China

Inflation and the dollar: the "little machine" regains its power until the PASO

Import trap: new controls added to the payment of freight abroad