President Javier Milei said that “Talking about the exchange rate is irrelevant” And it was based on the fact that with the contribution of US $ 20,000 million of the IMF, the gross international reserves of Argentina will rise to US $ 50,000, which, he added, “Weight pesos” are missing to justify a tension situation around the price of the dollar.
Thus, by radio the observer, the president seemed to overcome the concern that was lived in recent weeks around the price of the dollar that had as a palpable demonstration the sale of currencies by the Central Bank to supply a market that, until that time, had more demand than supply.
The dance of US $ 20,000 million, that the International Monetary Fund confirmed that Argentina requested, it develops still in the cloud of uncertainty it implies ignore periodicity of disbursements, The initial contribution And, one of the core questions, about What will be the commitments that the government will assume with respect to the exchange scheme.
It was Minister Luis Caputo, in another interview, who – not ratifying the continuity of the “Crawling Peg” scheme in force, which establishes that the official dollar rises by 1% per month – opened a period of uncertainty until the current model is ratified or changed.
Until Friday, March 28, the scheme was defined by a wholesale dollar ($ 1,074) that increases 1% per month; a Dollar “Blend” in which 20% of exports are settled to the “counted with liquidation” of $ 1,301 and an intervention by the Central Bank that seeks to keep the exchange gap under control, but which in recent days was expanded to 21%.
An important question to unveil in the short term to face uncertainty would change around what will be the amount of the Initial disbursement of the IMF credit, which the president has been insisting that he will allocate to cancel non -transferable letters that the treasure placed in the central to obtain dollars to pay the debts.
According to a report by consulting firm 1816, “historical data is quite forceful: of the 311 programs approved by the IMF since 2000in 59% of cases the first disbursement did not reach 20% of the total amount and in 92% of cases that first disbursement did not reach 50% of the total. ”
And he adds that the “85 programs signed by the Fund since 2018 only three had a first disbursement greater than 50% of the program and in none of those cases that first disbursement reached the US $ 2,000 million in absolute terms.”
Looking at the story, it is clear why the government bets on an exceptionality that allows it to make it clear that it has sufficient chips to face any eventuality, even considering that deposits in private weights in the financial system are around 80 billion.
Minister Caputo had advanced that the agreement with the IMF would be approved in the first four -month Donald Trump.
On April 2, the increase in tariffs for imports from Canada, Mexico, China and for a long list of products would begin to rule.
The Price reaction of the markets was a significant decline on Friday of 1.2% of the New York Stock Exchange, more pronounced in the case of the technological index and a rise of almost 5% in the volatility indicator.
The US are aimed at having a higher inflation, with sustained rates (the treasure bonds pay 4.3%) and that would keep at the prices of raw materials (with the exception of gold whose futures came to exceed US $ 3,000) in a framework of weakness.
The intersection between the lack of confirmation by the minister regarding the permanence of the regime of 1% monthly to the dollar and the resounding statement of the president about that there will not be a devaluation is that dollars appear and the Central Bank stops losing reservations as it did in the last two weeks.