The national government will receive the second disbursement from the International Monetary Fund (IMF) for USD 2 billion this Monday, as a result of the first review of the Extended Fund Facility (EFF) agreement signed in April. The arrival of these funds will lead to a new domestic debt operation between the Treasury and the Central Bank, which will have a positive impact on the level of net reserves, without changing the total gross reserves.
The maneuver consists of repurchasing Non-Transferable Bills currently held by the BCRA, an internal circulation mechanism that improves the Central Bank's balance sheet accounting. According to official sources, the Ministry of Economy will cancel a portion of these securities—which have no market value and are issued in dollars—in exchange for delivering the SDRs (Special Drawing Rights) received from the IMF.
This type of bill emerged in 2006, when Néstor Kirchner's government canceled the debt with the IMF and delivered non-negotiable public securities to the BCRA. Since then, the mechanism has been used to provide foreign currency to the Treasury in exchange for instruments with low or zero yields and maturities of 10 years.
Reconfiguration of targets and new accounting valuation
One of the new features of the renegotiated agreement is the downward revision of reserve accumulation targets for this year, which are now USD 5 billion lower than originally agreed. Minister Luis Caputo explained that this adjustment responds to a logical criterion, since reserve accumulation depends on the functioning of the economic program and not on fixed dates.
El FMI aprobó su revisión y girará USD 2.000 millones a la Argentina este lunes
Meanwhile, the president of the BCRA, Santiago Bausili, recently changed the valuation criterion for Non-Transferable Bills: they are now recorded on the Central Bank's balance sheet at their effective value in dollars, not at their technical value in pesos as was previously done. This change improves transparency and prevents the BCRA from recording artificial accounting gains resulting from exchange rate fluctuations.
According to official data, between May and July the BCRA reduced its holdings of Bills from USD 23.713 billion to USD 16.753 billion, reflecting the repurchase operations already carried out.
The IMF highlighted progress, although the reserve target was missed
In the official statement following the first review of the program, the IMF highlighted the "solid implementation of economic policies", the transition toward a more flexible exchange rate regime, the decline in inflation, and sustained economic growth. It also valued the Government's commitment to fiscal consolidation and reserve rebuilding.
El FMI aprobó su revisión y girará USD 2.000 millones a la Argentina este lunes
Nevertheless, the organization acknowledged that the quantitative net reserve target for mid-June was not met. Despite this, the Board approved the disbursement, considering that other key performance criteria were met and corrective measures were implemented.
From a monetary standpoint, IMF Managing Director Kristalina Georgieva emphasized that contractionary conditions must be maintained to continue reducing inflation and to advance the remonetization of the economy. She also called for greater clarity in the medium-term monetary framework.
