The former director of the Western Hemisphere Department of the International Monetary Fund (IMF), Alejandro Werner, assured that The organization could lend the government of Javier Milei “between 8,000 and 10,000 million” dollars as part of a new agreement, but warned that “he does not want the resources to be used to dollarize.”
Werner considered that the loan of US$57,000 million that the government of Mauricio Macri negotiated through the then Minister of Finance and current head of Economy, Luis Caputo, “is a maximum reference where one could be anticipating that the order of a new program with the Fund”.
“I would say that the range of fresh resources in a new agreement could be around $10 billion, between $8 billion and $12 billion. “I believe that the Argentine Government should fight for that,” He stated this Monday during an interview in Radio Miter.
For the former IMF official, the organization “wants there to be a new agreement” because, although the Argentine economy “is in a much better situation than was anticipated when this Government took office, there are still many imbalances and many issues to be resolved to that can be on a course of growth.
Among them, he listed “consolidating the decline in inflation towards a low double-digit level, between 30 and 10% in the next 24 months; being able to normalize the exchange situation even with stocks, and then remove it”; “refine a little and polish the fiscal adjustment,” and “a little more spending and a little more taxes than the adjustment that has been made.”
Javier Milei and Kristalina Georgieva
Milei and Georgieva met at the G7 summit.
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In this sense, Werner stressed that “Argentina needs three things from an agreement with the Fund: fresh money, to be able to carry out the withdrawal of the stocks in a more accelerated manner”, “reprofile previous debt maturities” and “have a policy framework that has credibility in the markets.”
He also noted that, within the framework of these negotiations, “the point of greatest tension will probably be the definition of an exchange and monetary policy.” “The Fund does not want to carry out a program under a flexible exchange rate scheme and then have the resources used to dollarize. If the country wants to dollarize, then the design of the program would perhaps have to be different,” he said.
The Government announced that it will negotiate a new agreement with the IMF
Last Thursday, the IMF approved the eighth review of the agreement with Argentina for the debt taken by Mauricio Macri’s government and will disburse US$800 million. In any case, he asked President Javier Milei to improve “the quality of the fiscal adjustment.”
The Minister of Economy, Luis Caputo, had ratified two days before that the Government will negotiate a new agreement with the organization. He stressed that this “will take a while,” but “It must be agreed with the Fund and eventually new money will arrive with this new program.”
In this context, Milei held a bilateral meeting on Friday with the head of the IMF, Kristalina Georgieva, during the G7 summit that took place in Italy. There the President informed her of the intention to sign a new agreement, and the official indicated that the program should contemplate how to go from stabilization to growth, as reported. Ambit.
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