The Argentine government is about to reach a new agreement with the International Monetary Fund (IMF), creating expectations about the conditions and the amount of aid that the country will receive. According to a report from UBS bank, the loan is estimated to be around US$20 billion as part of a new financing program. However, economist Camilo Tiscornia warned about the adverse consequences of such predictions.
In an interview with the Argentine News Agency, Tiscornia indicated that it is a complex moment in international economic markets and that speculation can have negative effects. He emphasized the importance of being careful and patient until the concrete details of the agreement are known. So far, the Executive has indicated that they are close to finalizing a deal with the IMF that would include new funds and the gradual elimination of the exchange rate controls.
Regarding the use of the new funds, Tiscornia suggested that they would likely be used to facilitate the payment of overdue debts, as the government has had difficulties accessing the international credit market. He considered it more important for the government to access that market, although the agreement with the IMF could contribute to reducing country risk and facilitating that possibility.
Concerning the value of the dollar, the economist mentioned that it is at low levels, but correcting that situation and eliminating the exchange controls is not an easy task. He highlighted that the main pending economic challenge is the elimination of those controls, an aspect in which the IMF can play a relevant role. The government has anticipated that the agreement includes the elimination of the controls this year, although it is still unclear what it will consist of exactly and when it will take place.
