The government entered a state of financial emergency, after the IMF confirmed to Minister Caputo that he should forget about fresh funds. Two extreme situations aggravated the needs for dollars: the fall in harvest estimates that went from 15,000 million dollars to 9,000 million and China’s decision not to renew the swap for 6,000 million dollars, which the libertarian administration must now return. .
Against the ropes, Caputo stretched his financial wrist to put together an architecture that would allow him to raise the 5,000 million dollars that the Treasury Palace estimates they need to avoid entering into a crisis.
The plan that the minister is working on structures a “non-traditional operation” outside the markets, which consists of getting commercial banks to disburse the dollars under the guarantee of international organizations: World Bank (WB), Inter-American Development Bank (IDB) and the Andean Development Corporation (CAF), which according to the minister would allow him to access these funds at a rate of 7% in dollars.
The government claims to have the support of Banco Santander, the BNP and the Rothschild Bank. However, before the multilateral credit organizations, the negotiation is not yet closed. Caputo obtained the support of the CAF, the agreement with the IDB is quite advanced, but the closing with the World Bank is very far away, a financial operator familiar with the negotiations entrusted LPO.
La Rural de Rosario warns Caputo that they are not going to liquidate: “We are going to sit on the grains”
Anyway, this novel design was born out of emergency. According to the numbers managed by the government, expectations of collection from liquidations of the agro-export sector fell by USD 6,000 million. This situation is superimposed by China’s refusal, of which a first tranche of another USD 6,000 million expires.
The expiration of the swap with China is no small matter. The urgency to prevent the Asian giant from demanding payment of those 6 billion dollars explains the emergency trip to Beijing that Foreign Minister Diana Mondino organized to obtain an extension.
The swap expiration is no small matter. The urgency explains Diana Mondino’s planned trip to the Asian giant on April 27, as anticipated by LPO. The chancellor urgently needs to get an extension.
In parallel, the countryside suffers from a combination of climatic complications, the plague that affects corn, the drop in international prices and the resistance to settling with a backward dollar.
The number two of the IMF, Gita Gopinath on her recent visit to Argentina.
The reduction in wheat projections revealed by both the Córdoba and Buenos Aires Grain Exchanges is located at 809,000 hectares, the smallest area planted in 11 campaigns in the province. With this, specialists warn of a new flash in the price of bread.
Regarding corn, a harvest of 50.5 million tons is projected, below the 57 million tons previously estimated. This reduction is attributed in part to the damage caused by the disease transmitted by the leafhopper, whose impact could increase, according to the latest report from the Rosario Stock Exchange (BCR).
But the possibility of Caputo getting the USD 5 billion is open. In that case, a rate of 7% would represent a notable improvement over the 20% that is required of Argentina today. The government’s expectations are that this loan will function as leverage to open the taps of Wall Street following a collapse in credit risk.
However, doubts are raised regarding the legality of the move. According to the current law on foreign debt promoted by Martin Guzman when he was Minister of Economy, a new take on foreign debt must be approved by both chambers in Congress.
