During this week there were several relevant novelties around the gross international reserves of the Central Bank. First, it was confirmed that the International Monetary Fund had postponed the quarterly review originally planned for Friday, June 13, initially rescheduing it for July 31. However, on Wednesday 11 at the last minute, IMF himself reported that the review will be advanced to June 30, that is, 30 days earlier than expected.
In that same statement, he also confirmed that there will be no new disbursements for Argentina due to the need to grant a triple Waiver (forgiveness) for three breaches: not having reached the goal of accumulation of reserves, having intervened in the exchange markets (MEP dollar, had liquidation and future), and continue with the issuance of Bopreal, despite the fact that the agency had requested for months to stop that practice. Given this scenario, the only option that would be left to the Ministry of Economy would be to renegotiate the original agreement, as was done in August 2018.
The second novelty was that, in parallel to this communication of the IMF, the Government decided to close a repo agreement with international banks for USD 2,000 million and, at the same time, launch a series of monthly tenders from Bonte for USD 1,000 million each until December, under conditions similar to those of previous emissions. The first placement is scheduled for the short week from June 17 to 19.
The third novelty arrived on Friday the 13th, when the closing of the repo was formalized and the USD 2,000 million were incorporated into international reserves; However, that same day there was also a loss of USD 161 million, so the net income was only USD 1,839 million. As aggravating, the United States sent a formal complaint to the Argentine government for having included in the Repo two Chinese banks, which generated diplomatic tensions.
As a consequence of this panorama, the market reacted with skepticism and on Friday was a gloomy day, not because of the weather but because all the exchange rates raised – except the officer and the blue – while the country risk again climb up to 680 basic points, level that had descended 655 days before. In summary, the judicial ruling against the president of the main opposition party ended up twisting the financial course of the government: what had begun with some relief ended very negatively, leaving the official officialism, while data of surveys that measure the political impact of the ruling in later days are awaited.
