An IMF technical team will travel to Buenos Aires in February, an important step in critical debt negotiations, after Argentine Economy Minister Martín Guzmán held talks in New York on Tuesday with the Deputy Director of the IMF’s Western Hemisphere Department, Julie Kozack, and the chief of mission for Argentina, Luis Cubeddu, which both parties described as “very productive.” Guzmán is scheduled to meet with the IMF managing director, Kristalina Georgieva, next week at the Vatican.
All merger or acquisition of companies that involve a market concentration and whose turnover exceeds ARG$4 billion ($66.3 million), must have prior authorisation from the Secretary of Domestic Trade, according to a resolution published in the Official Gazette. This is due to an update of 53.8% of the so-called “Mobile Unit” which in 2019 was ARG $ 26.40.
Argentina’s central bank (BCRA) released policy guidelines aimed at increasing the monetary supply, avoiding major exchange rate fluctuations, and reducing inflation. The monetary policy will support a managed exchange rate float to avoid sharp fluctuations in the value of the currency and will promote a “prudent expansion” of the monetary supply, the bank said. If needed, the bank will assist the Treasury regarding external debt payments.
The Union of Private Oil and Gas Workers in Neuquén called off a threat to go on strike after companies vowed to not fire 600 workers and suspend another 1,200 while waiting for production to pick up. The agreement was signed by Labour Minister Claudio Moroni at an extensive meeting in which the companies requested a crisis prevention procedure to reduce the burden of employer contributions for at least six months.
Argentine government ratified that it will use the loans for $6 billion approved by the Inter-American Development Bank (IDB), the World Bank and CAF, for infrastructure works and development programs. President Alberto Fernández will accept these loans approved during the government of Mauricio Macri “for their low cost of financing comparing to what the country could get in the markets,” official sources explained.
Argentine bonds dipped on Wednesday as the provincial government in Buenos Aires was forced to extend until Jan. 31 a deadline for creditors to agree or reject a plan to delay a $250 million bond repayment originally due on Jan. 26. Prices for Argentina’s over-the-counter (OTC) bonds were down on average around 1.3%, while Buenos Aires bonds fell across the board, led by a 3.5 point drop in the 2021 bond.
President Alberto Fernández sent to Congress the draft of the so-called Law of Restoration of the Sovereign Debt Sustainability. The bill gives power to the Government for managing liabilities, swaps or restructuring of bonds maturities under foreign law. “Today we have an unsustainable debt burden. This bill will give us the conditions to structure and execute the operations needed with the aim of restoring public debt sustainability”, said Economy Minister Martín Guzmán during a press conference.
The Minister of Productive Development, Matías Kulfas, suspended the application of the promotion regime of Law 27.506, known as the “Knowledge Economy Law” that granted tax benefits to productive activities based on the intensive use of technology and digital information, which is Argentina’s third export activity. Kulfas argues that it is necessary to review these benefits in order to strengthen SMEs through amendments to the law to be discussed in Congress.
President Alberto Fernández travels to Israel on his first official visit as head of state to participate this week in the International Leaders Forum in Commemoration of the International Holocaust Remembrance Day and the Fight against Anti-Semitism. About 40 world leaders and the vice president of the United States, Mike Pence, will attend this meeting. Governor of Buenos Aires province Axel Kicillof is also part of the Argentine delegation.
International Monetary Fund Managing Director Kristalina Georgieva said in Davos the lender has had “very constructive” exchanges with Argentina’s new government and would do whatever possible to assist the indebted country. Argentina owes the IMF around around $44 billion and the severe economic crisis since last year has forced it to enter negotiations with creditors to restructure around $100 billion of sovereign debt.