President Alberto Fernández will appoint Lisandro Cleri in the next few hours as chairman of the advisory committee on the Argentine external debt negotiations, according to sources from the Ministry of Economy. In addition, a Technical Relations Unit with the IMF will be created, led by Emiliano Libman, and Sergio Chodos will assume as executive director of the representation of the Southern Cone before the IMF.
The prices of the Basic Food Basket increase between 5% and 9% from this Thursday as a result of the application of VAT that had been exempted last August. Milk is the only product that will not undergo changes due to an agreement between the government, producers and supermarkets. Those products considered non-basic will increase up to 21%.
Alberto Fernández’ government will pay on Monday $98 million for maturities of the ‘Discount’ bond and on Tuesday $752 million for the controversial ‘Centennial’ bond, the National Treasury announced. Argentina will end this year having paid all maturing bonds in 2019, after securing the postponement until 31st August of $9 billion payments by launching Treasury bills in pesos with generous interest rates, maturing in April and June.
The new Argentine Government signed a social agreement with leaders of business, unions and social organisations to address the social emergency, seek a sustainable solution to public debt and launch an Economic and Social Council. The pact was achieved two weeks after Alberto Fernández took office and obtained the Congress approval of a public emergency law with a comprehensive economic plan.
Alberto Fernández’ administration will launch on Friday two new Letters of the Treasury in Argentine pesos, one expiring on April 3, 2020 that grants Private Badlar plus Margin, and another expiring on June 22 of next year, also with Badlar more 300 basis points. The new instruments follow the success achieved last week with the placement of Letters (Letes) for ARG$18.9 billion, at an annual nominal rate of 44.76% and an internal return of 49.80%.
Fitch Ratings has upgraded Argentina’s Long-Term Foreign-Currency Issuer Default Rating (IDRs) to ‘CC’ from ‘RD’, and its Short-Term Foreign-Currency IDR to ‘C’ from ‘RD’, thus reversing Friday’s cut to restricted default imposed after the government delayed payments on $9.1 billion of Treasury bills. However, Fitch said that debt service will become difficult again in the second quarter due to a wall of payments of around $25 billion, out of $64 billion due for the entire year.
Lawmakers handed President Alberto Fernández extraordinary powers to renegotiate debt terms with creditors at a time the new government seeks to renegotiate about $100 billion owed to private creditors and the International Monetary Fund. The emergency bill authorises Fernández’s administration to take as much as US$4.6 billion in Central Bank reserves to pay down debt denominated in dollars.
Argentina’s Senate gave final legislative approval to an emergency economic reform package. Argentina faced a deep economic crisis with inflation of more than 50% and an economy expected to shrink for a third straight year in 2020. The Government of Alberto Fernandez aims to have restructuring talks on about $100 billion in debt owed to bondholders and the International Monetary Fund.
Argentina plans to partially roll back an export tax on hydrocarbons to a maximum of 8% from a previous 12%, according to a change to the emergency bill sent by the Government to the Congress. The trims come at a time when Argentina is re-emerging as a modest pipeline gas exporter, mainly to Chile, thanks to rising shale production. Argentina’s crude exports increased 14% in January-October, on the year, to 66,442 b/d, according to energy secretariat data.
Argentina’s government is seeking higher taxes on agricultural exports and to tax foreign assets held abroad, the Economy Minister Martin Guzman said to the press. The government wants to raise export taxes on wheat and corn to 15% from 12%. The bill would also raise the tariff cap on soybean exports to 33% from 30%. It also seeks to tax financial assets abroad. The purchase of foreign currencies would be taxed by 30%.