The government of Javier Millay has taken another step towards negotiating a new financing program with the International Monetary Fund (FM), Argentina’s largest creditor and the multilateral organization’s largest debtor. IMF Managing Director Kristalina Georgieva welcomed Economy Minister Luis Caputo to Washington on Thursday and congratulated him on stabilizing the South American economy, but did not comment on the negotiations. The Argentine government hopes to obtain new funds to help lift exchange controls (“equities”), a measure President Ultra has promised to take, but its postponement has prevented investments from arriving. There is.
“We had a very good meeting,” Georgieva said in the organization’s hallway after her meeting with Caputo. “We are aligned with the national priorities,” he added in response to a question from reporters. He did not mention the new agreement, saying only that “we have the objective of thinking together as a team about what is best for Argentina.” Georgieva then added through her social networks: “We celebrate Argentina’s progress in stabilizing its economy while supporting those most in need. The IMF continues to work with Argentina towards a more prosperous economy for all Argentines.”
The meeting lasted just over 30 minutes and was held within the framework of the IMF and World Bank’s annual summit after the G20 finance ministers’ meeting. Argentine Central Bank Governor Caputo, Santiago Bausiri, and other collaborators had arrived at the IMF headquarters in the US capital early in the morning. First, they met with the organization’s Deputy Director-General Gita Gopinas, who is working specifically on the Argentine case following the resignation of Director-General Rodrigo Valdez, and Luis Cubedu, Deputy Director-General of the Ministry of the Western Hemisphere. Mirei asked me a tough question.
“It was a very good meeting and we are very happy with the result,” said Caputo, whose team last saw Georgieva in Rio de Janeiro in July. They stressed that the government was “buying trust.” But they also acknowledged that negotiations on a new program with the IMF are still a long way off. If the dialogue is successful and formalized, a new agreement could be signed in 2025. The current agreement was sealed at the beginning of 2022. Peronist Alberto Fernández. The South American country then obtained regular spending to pay interest on a multimillion-dollar debt it contracted with the IMF itself in 2018 under conservative President Mauricio Macri. This is approximately $45,000, the largest loan in IMF history. A million dollars. Argentina has agreed to reduce its budget deficit, increase issuance, increase reserves and return capital between 2026 and 2032.
Through significant adjustments in public investment, the Millais government achieved a budget surplus and suppressed inflation. Currently, the ninth review of the program is underway, with one-tenth remaining until the end of the year, but the strengthening of foreign exchange reserves and foreign exchange, which is a key challenge for multinationals and also required by the Fund, We aim to raise funds to unlock the market. . Millais has been holding off because of concerns that, with limited resources, he will not be able to control the strength of the dollar and its impact on inflation. The far-right executive branch’s intention is to obtain between $10,000 and $15 billion in additional spending. And he’s in a race against time. Argentina has $20 billion in debt maturing next year, and the central bank currently has $29 billion in reserves.
Despite widespread alarm, Casa Rosada believes Milley’s ideological affinity with the Republican candidate could facilitate a new deal with the IMF if Donald Trump wins the next U.S. presidential election. I believe it will be done. Macri became president in 2018. In parallel, Millay’s changes in relations with China introduced a source of tension in Argentina’s relations with the United States. President Ultra has since nullified any commercial exchange with the Asian giant (“I’m not going to do business with China, I’m not going to do business with any communists,” he said a year ago). I came to think that this was an extremely serious problem. “We are an interesting commercial partner,” he said, as he traveled to Beijing next January to announce that $5 billion worth of currency swap renewals would be approved.
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