Buenos Aires, June 28 (EFECOM).- The International Monetary Fund (IMF) gave its “approval” this Friday for the measures announced by Argentina’s economic team that involve eliminating another source of monetary emission to lower inflation.
“We welcome the measures announced by the Minister of Economy, Luis Caputo, and the President of the Central Bank, Santiago Bausili, to strengthen the monetary policy framework,” said official sources from the IMF.
Caputo announced this Friday the “second stage” of the stabilization plan of the Government of Javier Milei, which consists of eliminating the issuance of money by the Central Bank (BCRA) for the interests paid by the liabilities of the monetary entity.
“In the first stage, the money issuance tap was closed due to fiscal deficit, something that was greatly abused in the last government and generated this imbalance and the inflation that we are experiencing,” said Caputo.
“In this second stage we are closing the tap on the second channel of issuance, which is the interest that the BCRA pays on remunerated liabilities,” the minister explained.
The Milei Government achieved a fiscal surplus of 0.4% of GDP in the first five months of the year, thus eliminating the first cause of monetary issuance, which served as a fiscal anchor to slow down monthly inflation of 25.5% in December 2023 to 4.2% last May.
The elimination of the monetary issue for the BCRA’s liabilities is announced after Congress approved in the early hours of this Friday the so-called “Bases Law” and a fiscal package, an ambitious package of economic reforms that is expected to allow it to consolidate the balance fiscal.
“The exit from the stocks is a third stage,” said Caputo, in reference to the lifting of restrictions to access the exchange market.
Argentina is negotiating a new program with the IMF, after on June 14 the Executive Board approved the eighth review of the agreement that expires in November, which allowed an immediate disbursement of approximately 800 million dollars for the country.
“This part of the monetary program will be part of this new program. We thought it was important to bring it forward with the IMF, because we are in mutual agreement,” said Caputo, regarding what was announced on Friday.
Total disbursements made under the Fund’s agreement with Argentina amount to approximately $41.4 billion.
In March 2022, the then government of Peronist Alberto Fernández (2019-2023) signed an agreement with the IMF to refinance loans for some 45 billion dollars that the organization had granted to Argentina in 2018, during the presidency of the conservative Mauricio Macri (2015-2019).
The approval for new disbursements to Argentina by the IMF depends on the fulfillment of the quarterly goals and the approval of each review, funds that, in turn, the South American country uses to cancel its debt with the entity, which amounted to 40,899 million dollars at the end of 2023. EFECOM
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