IMF and debt maturity

03/08/2023
 IMF international monetary fund
IMF international monetary fund


IMF : Days before expiration , how yuan payments will affect reserves

The government must transfer $3.5 billion to the agency between Monday and Tuesday, and there will be no advance payment to repay the funds. We are waiting for the official conclusion of the technical agreement.

With the first of two IMF deadlines looming in three days and Washington unlikely to be able to make payments before then, the government is considering what to do with those who must make almost 3,000 payments in total. 5 billion dollars. One option is to settle in renminbi by initiating another swap with China, and the market is already calculating how much renminbi the monetary authority will have if it uses these currencies. The prolongation of the talks stretched the IMF's time limit to the limit. Due Monday, July 31 and August 1, Monday and Tuesday of next week, it will drop nearly $3.5 billion, with $2.66 billion in principal and $830 million in interest. Since there is no time to wait for payments before that date -because the Minister of Finance assured that the first batch of foreign currency will arrive after PASO-, the executive will need another project to process these payments. In late June, Economía made the payment using the central bank's remaining special drawing rights (SDRs) and the yuan. I can only rely on RMB this month. On Monday, July 31 and August 1, Monday and Tuesday of next week, maturities will be reduced by about $3.5 billion, of which $2.66 billion principal and $830 million interest.


According to calculations by the consulting firm Equilibra, "the government will have to pay from its own resources the 2,644 million dollars that expire at the end of the month - if it wants to use only the yuan, it will have to initiate another exchange with China in the amount of 5,000 million dollars , because according to our calculations, China can only contribute 1.7 billion dollars of the first tranche, or not, because we know that the agreement is about to go to the IMF board.The second option, they said, could make the markets nervous.Amílcar Collante, An economist and member of the Southern Economic Research Center (Cesur), he also provided figures on the impact of using the yuan for payments on Monday and Tuesday, estimating that the BCRA would have the equivalent of some 6,054 million dollars in yuan before the delivery.If you use them to meet the deadline,it will still generate another $2.519 billion in swaps.



The Ministry of Economy did not answer questions about whether the technical protocol will be officially communicated to employees in the next few hours. The Minister of Economy, Sergio Massa, confirmed in a television interview that "we have an agreement that between August and November there will be items to liquidate the entire expiring plan." He told Channel 26: "We now have a few days to define what the bridging relationship will look like and clarify the discussions on payments by the end of the year." There is still some uncertainty about how the plan will be implemented. Funds can be used for allocation after negotiations are complete. Among them, once an agreement is reached on the fifth technical review to strictly evaluate the fulfillment of the goals in the first quarter of this year, technical negotiations will be suspended until the end of the electoral process and will resume at the end of the year. . In November of this year. According to private estimates, the BCRA swap has $6,054 million left. If he used them to meet the deadline, he would keep $2,519 million

Thus, the program will consist of two payments, one in the second half of August and another at the end of November. Initially, the program, which is still active, had 3 remittances from Washington: June, September and December. The first payment will be the highest. Some indications given by Masa are that the first batch of shipments will be around $8 billion, and the remaining shipments in November will be around $2.8 billion. This would offset the $10.8 billion left in central bank coffers by 2023. The way those dollars arrive has changed significantly from the original guidance. With the allocation of $8 billion in August, the government will have money to pay the debt that is due in August, September and October.