The government agreed with the IMF that it would raise the exchange rate only if there was no risk of inflation collapsing.

The government agreed with the Monetary Fund to present a roadmap at the end of the month next monetary measurea change in the sequence of reserve accumulation at the Central Bank, and a commitment to reduce taxes in the second half of the year. He also said, before negotiations begin for a new program with more disbursements abolition of exchange rate This has no set date and will only happen as long as it does not put at risk the inflationary slowdown process.

This was mentioned by the Ministry of Economy in a joint statement with the BCRA after the board’s approval was official, which took place this Thursday in Washington. For this reason, the Central will receive about 800 million US dollars in the next few hours to replenish the reserves. The IMF celebrated that the program is “Firmly on track” and requested that from now on reform the executive branch Fit Quality,

Regarding the exit from stocks, the economic team did not give specifics about the timing, but assured that it would try to maintain macro stability. “BCRA is considering Progress in the liberation of exchange controls And as long as these measures are in place, there will be greater flexibility in the exchange rate Do not involve excessive risk for the reduction of inflation and strengthening its balance sheet, as indicated in the agreement. Considering the evolution of relevant economic variables, this process will be defined by the Argentine authorities themselves, who will share with the IMF the parameters that will be monitored, without including specific dates or commitments of measures.

And the Central Bank also promised to present a monetary program at the end of the month. “The BCRA will continue to conduct monetary policy in a flexible, prudent and pragmatic manner. Based on the progress achieved in the retooling of monetary policy tools and the control of money creation factors, the agreement provides for a presentation to the IMF. Monetary programming framework at the end of June 2024the monetary authority said.

Regarding taxes, the economic team assured that “in the second half, the economy will resume growth and the changes in energy tariffs, the update in the fuel tax and the reduction in operating expenses will have a full impact on the fiscal accounts, the government hopes to initiate a Significant reduction in the most distorting taxesPAIS tax will start after the implementation of the Aadhaar law. In this way, the non-quantitative commitments agreed in the agreement will also be fulfilled.”

“Given that the current level of reserve accumulation already exceeds the level projected in the programme for the entire second quarter (the original target of USD 9.2 billion by June 30, 2024), it was agreed Second quarter target raised to US$10.9 billionwithout affecting the basic annual target (which remains at US$ 9.7 billion as of December 31, 2024),” he said. Thus, in summary, at the end of this month the BCRA should be able to show accumulation of US$ 1.7 billion more than expected, within the framework of the slowdown in foreign exchange purchases by the monetary authority.

The government acknowledged that the first quarterly reserve target was exceeded by about USD 3,000 million, so the Central Bank would have had a net accumulation of USD 11,300 million since the change of command in December, not counting the disbursements coming in the next few hours.

On the other hand, the economic team assured that a key thread of the program was to eliminate the deficit. “The government’s strong commitment to the immediate implementation of a Fiscal Anchor “This was the key to macroeconomic stabilization.” “The objective of fiscal balance outlined in the agreement was achieved in record time,” Economia said.

The executive branch sought to defend itself against objections raised at the time by the IMF that adjustments should not affect Retired and unprotected areas of society. “Fiscal balance was achieved without neglecting the most vulnerable populations, social programs were significantly strengthened, which reach beneficiaries directly, without intermediaries” and listed that the AUH grew by 90% in real terms in recent months and retirement without bonus increased by 3 percentage points.

Louis Caputo And Santiago BausiliOn the other hand, he ensured that monetary policy prepares the ground for a decline in inflation. “The macroeconomic balance resulting from the greater fulfillment of the three targets established in agreement with the IMF, as well as other actions by the authorities, have contributed to a rapid reduction in inflation. Inflation in May was 4.2%, a rate that represents half of the inflation estimated for that month by the private sector in December,” he concluded.