Approved the review of the first quarter of the agreement with the International Monetary Fund (IMF), the national government ratified its objective of accumulating international reserves for US$ 5,800 million during this year, despite the higher expenditures for energy imports due to the war between Russia and Ukraine.
The Argentine government also maintains its commitment to strengthen the public debt market in pesos, and to defend the price curve of public bonds in national currency.
The The IMF Executive Board approved on Friday the first revision of the Extended Facilities Agreement with Argentinawhich enabled an immediate disbursement of around US$ 4,010 million.
According to the multilateral organization, all ongoing and end-March 2022 performance criteria and indicative targets met; and initial progress was made on the structural front, in a context of heightened global uncertainty, he said in a statement.
“This marks the conclusion of an important initial step in the framework of the program to support the ongoing economic recovery and strengthen stability,” said the managing director of the IMF, Kristalina Georgievon his Twitter account announcing the deal.
The first review of the Extended Facilities program was approved with which the debt taken with the IMF in 2018-2019 is refinanced.
We continue to implement macroeconomic policies to strengthen growth with job creation and stability. https://t.co/Db4zZmNsbq
– Martin Guzman (@Martin_M_Guzman) June 24, 2022
In this sense, the Minister of Economy, Martin Guzmanassured on the same social network: “We continue to implement macroeconomic policies to strengthen growth with job creation and stability.”
Following the Executive Board discussion on Argentina, Georgieva noted that “the Argentine economy continues its post-pandemic recovery, but is affected by shocks associated with the war in Ukraine and broader global uncertainties.”
“Higher global food and energy prices are adding to inflationary pressures and defying fiscal and reserve accumulation targets”affirmed the owner of the Fund.
According to Georgieva, “despite these shocks, the authorities met all quantitative targets by the end of March 2022 and have made progress in implementing the program’s structural commitments.”
In the context of “market volatility”, indicated the head of the Fund, the efforts to strengthen and deepen the debt market in pesos, which is an essential pillar of the 30-month agreement, “remain critical, along with the firm implementation of fiscal objectives.
“Continuous progress is needed in the implementation of the structural reform agenda,” he said, for which he considered that “the decisive implementation of the program’s policies will be essential to support Argentina’s economic recovery, strengthen macroeconomic stability and advance further in addressing its deep-seated challenges to lay the foundations for more sustainable and inclusive growth”.
The decision of the Executive Board allows an immediate disbursement of SDR 3,000 million (about US$ 4,010 million) and marks the conclusion of an “important initial step” within the program, the organization highlighted.
The Government agreed with the IMF, as part of the debt renegotiation, the goal of increasing reserves by US$5.8 billion by 2022; US$4 billion by 2023 and US$5.2 billion by 2024.
Following the announcement of the green light for the first review of the agreement, Minister Guzmán ratified the goal of accumulating international reserves of US$5.8 billion, despite higher energy costs, which at this time of year tripled those spent in the same period. from 2021
This was revealed during a meeting that the head of the Palacio de Hacienda held on Friday afternoon together with the president of the Central Bank, Miguel Angel Pesceand the Secretary of Domestic Trade, William Hangwith representatives of mass consumption companies.
There, Guzmán, Pesce and Hang discussed the prospects for economic policy with a view to the quarterly renewal of the program, as reported in a statement, and ratified that “the aim is to maintain the objective initially set for the accumulation of international reserves of US$ 5,800 million in the year”.
This objective remains in force despite the increased spending on energy importswas explained.
In this regard, Guzmán indicated that, after the war in Ukraine, “the seasonality in the flow of imports and exports was altered, and he highlighted that the strong growth in the value of energy imports, which went from US$ 4,641 million in the first five months of 2022 compared to US$ 1,520 million in the same period of 2021”.
This “accentuated the needs of administration of foreign trade”, they marked from the Treasury through a press release.
“The national government is fully committed to strengthening the public debt market in pesos and we will carry out all actions for this purpose”pointed out the head of the Palacio de Hacienda.
In his turn, the president of the Central Bank, Miguel Pesce, affirmed that the current management will “defend the price curve of public bonds in pesos, and all the effort that is necessary will be put into this.”
