Yesterday it was obvious that the Argentine government can not touch the matrix of its monetary and exchange policy without having the approval of the IMF. But simultaneously, it was shown that the highest authorities of the body are willing to give all the necessary support so that the program committed to Mauricio Macri’s team stays afloat.
Nicolás Dujovne went to Washington to raise, once again, that the rules with which the Fund regulates the Ninety exchange rate in 9% of the countries that receive its supervision do not have the same effect in Argentina. The obsession of the body is to avoid permanent intervention (an ingredient that characterized the brief management of Luis Caputo in the Central), and therefore enabled a wide enough band of flotation so that the government is not tempted to sell foreign currency to contain its price .
However, the volatility of the peso justified (in the light of what happened in 2018) that there was some flexibility. The minister had to abide by a rule (daily auction for a fixed amount) but in exchange he could announce the sale of US9600 million from April, before the IMF board approved the last revision.
What persuaded Christine Lagarde and David Lipton to advance this support was the new monetary tourniquet of the BCRA, announced in the afternoon, which is accompanied by a reform of the Charter that puts a lock on the financing of spending with issuance.
All this movement aims to contain the volatility of the dollar and inflation. It does not affect the rates, nor the price of the food, nor the electoral swings. Only install expectations of higher relief watch over at least until April.