Government negotiates loans with Russia, Saudi Arabia to increase reserves

Driven by the decline in reserves at a key moment in negotiations with the International Monetary Fund (IMF), government seeks US $ 6.5 billion loan from Russian-Saudi fund, in order to inflate the coffers of the Central Bank and to reduce the pressure on the dollar.

The proposal is part of negotiations the foreign minister started this week Santiago Cafeiero and the President of the Chamber of Deputies, Sergio massa, with the Minister of Foreign Affairs of Saudi Arabia, Faisal al Saoud, and that they would have a second round next week with a delegation from these countries.

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The shortage of dollars in the plant leads the Government to seek financing alternatives. Under Cristina Kirchner’s government, the option was trade with China. During these hours, progress is made on a technically different proposition.

As indicated by the portal The nation, the 6.5 billion US dollars would be provided in two installments within a three-year period, in exchange for bonds and illiquid central bank assets.

Government seeks to close deal with IMF before year-end

As Cafiero and Massa advance in negotiations with the Russian-Saudi fund, the Minister of the Economy, Martin guzman, seeks to complete the definition of the terms of the agreement with the IMF before the end of 2021.

Government entered additional time to close it agreement, which is trying to reschedule the US $ 44,000 million debt it owes to this multilateral lending agency. Occurs at times when reserves The international accounts of the Central Bank are located below deadlines which the country must face until March, according to various economists.

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The talks with the technical staff they accelerated and they have a 20-day window before the break for the end of year celebrations at the Caisse. Before Christmas, it is estimated, the board of directors will meet of the body.

In this case, not only the fate of the agreement can be defined with the country, but the agency will also analyze local demand, and which was gathered by the G20, to review the surcharges charged to countries like Argentina.

For him 22 december, meanwhile, expires second installment of the loan principal, for approximately 1900 million US dollars, which the government assured that it would pay with the “pandemic funds” issued by the IMF last August.

Cristina Kirchner’s wink and Pope’s support strengthen Martín Guzmán’s position

In the midst of negotiations between the government and the IMF for debt restructuring, Cristina Kirchner shared a detailed letter to address the issue. “It is the head of the executive power who leads the negotiations in the exercise of his constitutional responsibility in the matterSaid the vice-president, amid criticism from the media and the opposition.

In addition, he stressed that, by the law to strengthen the sustainability of public debt, it is Congress, which must then approve the eventual agreement and ensure that “No one is talking about ignoring debt.” In the last hours, Mauricio Macri and Elisa Carrió had asked the government to “honor the debts” of Argentina.

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A few days before, Guzman had been designated by the Pope Francis as a member of Pontifical Academy of Social Sciences of the Vatican.

For the head of the Palacio de Hacienda, his link with Francisco is strategic in the face of the negotiations that Argentina is leading with the IMF. So much so that after each of their meetings, the Pope made statements in favor of “significant reduction in the debt of impoverished countries”.

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Both situations are interpreted by the government as an endorsement of the negotiations Guzmán is leading with the Fund and could enter their home stretch in the last month of the year.

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