MercoPress. South Atlantic News Agency

IMF mission arriving in Buenos Aires to monitor progress

Economy Minister Luis Toto Caputo's management fell short of the IMF's reserve target

A technical mission from the International Monetary Fund (IMF), led by Bikas Joshi, is due in Buenos Aires on Tuesday to conduct the first review of Argentina's new economic program. The proceedings were initially set for June 15 but postponed to allow more time for the Libertarian Government of President Javier Milei to meet reserve targets.

The program aimed to add US$ 4.4 billion to Central Bank reserves by June 13, but the government fell short by US$ 4.3 billion. While fiscal targets were exceeded and monetary goals met, the reserve accumulation failure will be a key focus.

The IMF may grant a waiver for this non-compliance, potentially releasing US$ 2 billion upon board approval.

The government's attempts to boost reserves through bond deals only yielded US$ 500 million in June, far below expectations.

IMF Spokeswoman Julie Kozack said earlier this month that the mission would ”evaluate the progress on the objectives and goals of the program and also (...) discuss the objectives of the agenda for the future.“ She also emphasized that ”our team continues to work frequently and constructively with the Argentine authorities“, confirming that ”as part of the first review of the program, I can add that a technical mission will arrive in Buenos Aires at the end of this month.“

Regarding Milei's administration, Kozack noted that the measures adopted represented ”another important step to consolidate disinflation, support the government's strategy, and accumulate reserves.”

The Government's intervention to keep the Argentine peso / US dollar parity from skyrocketing is also expected to bring up some controversies between local officials and the visiting team. The Central Bank admitted having pumped some US$ 1.946 billion between April and May into the currency exchange market, which accounts for part of the missing reserves.

On the other hand, the Libertarian Government overachieved its fiscal target in the first five months of the year, with a primary surplus of US$ 6.9 billion, equivalent to 0.8% of GDP and well above the $6.07 billion required by the IMF.