The government and the IMF on Thursday announced the agreement for an expanded 30-month financing facility, including a program to tame high inflation, reduce money printing to finance the budget deficit and offer real interest rates. positive.
The deal, which must be approved by Congress and the IMF’s board, has already been criticized by some opposition lawmakers and some hard-left members of the ruling pronist coalition, who doubt it can be implemented.
“That’s not enough to solve Argentina’s problems,” said Camilo Tiscornia of the Buenos Aires-based consultancy C&T. “We are going to have to respect the agreement, which will not be easy, so there we will have a very important challenge.”
The tightly controlled currency peso fell slightly on Friday, although it strengthened in popular alternative markets. The S&P Merval stock index fell more than 2.5%, while the JP Morgan Argentina country risk index climbed.
Bonds, especially those for the 2046 and 2035 odds, fell below 30 cents on the dollar, territory that reflected investors’ fears of possible defaults in the future, despite the IMF’s breakthrough, although the broader context of the global marketplace has not helped either.
“The war in Ukraine has taken some of the air out of the good news of the deal,” one analyst said.
Armando Armenta, New York-based senior economist for AllianceBernstein, said the deal had already been assessed after a pre-deal was announced in January, but it was still positive for the country.
“Yesterday’s announcement confirms our long-standing view that the Argentine authorities understand the disastrous consequences of an arrears to the IMF,” he said.
“We expect the deal to be ratified by Congress, albeit by a narrow margin, as hardline members of the governing coalition and the opposition would attempt to distance themselves from the deal.”
Congress is expected to begin reviewing and debating the IMF deal next week. He officially arrived at Congress on Friday.
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Economy Minister Martin Guzman told local radio on Friday that the government hoped the bill would be approved before a $2.8 billion payment to the IMF came through on March 21, which would allow the country to pay it with newly received funds.
Argentina USD bond prices https://tmsnrt.rs/3fz89Zs
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Argentina: economic objectives https://tmsnrt.rs/3sG3w77
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