The Government advances in the agreement with the IMF: what the first measures would be

The Government aims to publish the decree authorizing the signing of the agreement with the International Monetary Fund (IMF) before sending it to Congress for validation.

According to official sources, two key aspects of the new program, the amount and the initial measures, already have consensus between the economic team and the technical staff of the organization, although they haven't been publicly detailed yet.

Deadlines and approval process

• The Minister of Economy,  Luis Caputo, stated that the process in Congress would begin this week.
• The decree would be published in the Official Gazette in the coming days.
• The agreement must go through the  bicameral commission before its discussion in both chambers.
• The Government's goal is for the new program to be defined in the first quarter of the year  (until April).

Use of IMF funds

The Executive plans to use the disbursements from the IMF to cancel the Non-Transferable Letters held by the Central Bank, aiming to avoid an increase in the State's total debt.

• According to private estimates, these letters have a market value of USD 23 billion, while their nominal value is USD 67 billion, according to GMA Capital.
• The Government will argue that the debt swap will imply a reduction in the consolidated liabilities.
• The operation would also mean a change of creditor, transferring the debt from the internal public sector to the IMF.

Market expectations about the agreement

The market is closely following the negotiations, as the agreement with the IMF could boost Argentine assets, which have experienced weeks of volatility.

• 1816 highlighted that investors are evaluating the size of the program, the disbursement schedule, and the IMF's conditions to determine its impact on the market.
• Invecq noted that the IMF might demand the elimination of the blended dollar, which in 2024 represented a resignation of USD 15 billion in export revenues.
• GMA Capital warned about the reserve situation, which remains at critical levels despite the Government's fiscal improvement. Currently, gross reserves are USD 28.18 billion, while net reserves remain at -USD 4.328 billion.

Potential impact on Argentine assets

From Quantum Finanzas, former Finance Secretary Daniel Marx stated to Infobae that an agreement with the IMF could act as a positive catalyst for Argentine bonds and stocks, in an international context of high volatility.

• The signing of the agreement could generate a revaluation of public securities.
• It is expected that the  yields of Argentine debt will approach those of other countries in the region.
• The reversal of the correction in asset prices in recent weeks is one of the factors that would drive this movement.

Ultimately, the agreement with the IMF is key to the Government's economic strategy, not only for its fiscal and financial impact but also for its role in market stability.