Friday, December 8, 2023

Argentina warns the IMF that it will use “all the tools” before the dollar rises

The Argentine Minister of Economy, Sergio Massa, warned this Tuesday that he will use “all the tools of the State” in the face of the skyrocketing of parallel exchange rates and in this sense warned that he notified the International Monetary Fund (IMF) for the restrictions provided for in the program that seeks to “change”.

“We are going to use all the tools of the State to order this situation and in this sense we notified the IMF of the restrictions that weighed on Argentina and we are going to change in the rediscussion of the Program,” Massa said in a message on his Twitter account, since that the organism limits the interventions of the Central Bank in the parallel exchange market.

The minister added that he will “use the economic Criminal Justice as a vehicle for investigation and clarification of some behaviors” and the Financial Information Unit (UIF) and the National Securities Commission (CNV) for “the analysis of operations related to money laundering of money”.

Massa, who also represents the third force in the ruling Frente de Todos coalition and sounds like a candidate for president this year, acknowledged that “several days ago” Argentina has been experiencing “an atypical situation of rumours, versions, false reports and their consequent impact on dollar-linked financial instruments.

The prices parallel to the official exchange rate continue to rise without brake this Tuesday in Argentina due to the escalation of inflation (104.3% annual) and the shortage of foreign currency, which makes it difficult for the Peronist government to manage until the presidential elections.

In the informal market, the price of the “blue dollar” -which is sold on the black market and which in practice serves as a reference for citizens due to the impossibility of accessing the official dollar- increased 35 pesos, to a new record of 497 pesos per unit, in an exchange run that is in its second week.

At the same time, the so-called financial dollars accompanied the rise, widening the gap with the official price to 118%.

The dollar “counted with liquidation” (CCL, which consists of buying shares or bonds locally with Argentine pesos and selling them in dollars on Wall Street) rose 4.4%, to 482.5 pesos per unit.

The “bag dollar” or “MEP dollar” (which is obtained by buying assets that are listed both in pesos and in dollars, are paid in pesos when acquiring it and are sold in dollars in the Argentine stock market) rose 4.9%, to 470 .97 pesos per unit.

In the official foreign exchange market, the wholesale exchange rate rose 0.3%, to 220.85 pesos per unit for sale.

“At the same time, we are going to continue with the multilateral agreements”, the transformation of “exports into yuan” and the disbursement agreement with the IMF to strengthen the reserves that were affected by the impact of the drought, Massa added.

The economic team will travel to Washington in the coming days to negotiate with the IMF, an organization with which Argentina has a program to refinance 45,000 million dollars that foresees quarterly goals that the country failed to meet in the first quarter of 2023.

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