IMF APPROVES DEAL
A couple of hours before press time, the executive board of the International Monetary Fund approved its new agreement with Argentina that will see the country restructure its US$45-billion debt. The news, confirmed to multiple agencies by unnamed sources and broken by the Reuters news agency, was the final hurdle. IMF staff, at the time of writing, had yet to comment.
MARCH IN MARCH
Last Thursday’s commemoration of the anniversary of the 1976 military coup anniversary was dominated by a massive march organised by the La Cámpora militant grouping from the ex-ESMA Navy Mechanics School to Plaza de Mayo where the final statement mingled hostility towards the Alberto Fernández administration’s agreement with the International Monetary Fund (IMF) alongside the customary human rights agenda. The statement also criticised the country’s economic course, calling for a more “inclusive” Argentina with “genuine employment.” This was the day’s biggest event but not the only one – President Fernández (recently estranged from Vice-President Cristina Fernández de Kirchner by the divided vote on the IMF agreement) headed a low-key rally at the Science and Culture Centre in Palermo with some of his ministers, calling for unity, while the far left staged its own march to Plaza de Mayo, almost as numerous as the Kirchnerite and even more critical of economic policy. Finally, La Cámpora leader Máximo Kirchner added a controversial note to the occasion by accusing citizens of the Federal Capital of voting for politicians who sought to cloak the misdeeds of the dictatorship, prompting a fierce pushback from opposition leaders.
WAR ON INFLATION
Domestic Trade Secretary Roberto Feletti on Tuesday ordered the prices of 580 products to be rolled back to last March 10 while on the same day the Central Bank hiked interest rates two percent, from 41.5 to 43.5 percent for traditional fixed-term deposits and from 42.5 to 44.5 percent for Leliq bonds. Inspectors enforcing price controls observed empty shelves in many supermarkets with the latter arguing that various items were being bought up by smaller retailers because the discount rates obtained by the big chains due to their bulk purchases were lower than the normal wholesale prices (which rose by the same 4.7 percent as retail prices last month, the INDEC national statistics bureau reported on Tuesday).
PARIS CLUB POSTPONEMENT
With the International Monetary Fund (IMF) poised to approve an Extended Fund Facility to Argentina, Economy Minister Martín Guzmán succeeded in midweek in obtaining a reprieve on Paris Club capital and interest payments of almost US$2 billion due at the end of this month, spinning out the negotiations for a further three months. The original debt was US$2.4 billion but Guzmán paid off US$430 million during the last nine months as a goodwill gesture. Punitive interest rates of nine percent (which the government hopes to renegotiate) form around a quarter of the remaining sum. Guzmán, who flew out to the French capital on Monday evening, found time for a “productive” chat with IMF Managing Director Kristalina Georgieva.
MARKET WATCH
The “blue” parallel dollar closed the week yesterday at 201 pesos from 202.50 pesos the previous Friday, edging downwards as a result of yesterday’s definite approval by the International Monetary Fund (IMF) of the agreement with Argentina as well as the Central Bank’s decision to up interest rates last Tuesday. Meanwhile the official exchange rate rose a full peso during the week to 115.50 pesos yesterday, as quoted by Banco Nación, continuing this month’s acceleration, or 190.57 pesos if the 65 percent surcharges for savers are added. The parallel but legal exchange rates of the CCL (contado con liquidación) and MEP (medio electrónico de pagos) moved in the opposite direction to the “blue,” advancing back to at or above the 200-peso mark at around 201 and 200 pesos as against some 195 and 194 pesos respectively the previous Friday. Prior to the IMF approval, country risk was up at 1,832 points from 1,795 points at the close of last week but no final figure was available at press time yesterday.
AGRI-AGRO CONTINUES
There were various tractor demonstrations in various inland provinces in the course of the week to protest the government decision to up export duties on soy oil and flour from 31 to 33 percent (an issue over which farmers were also joined by the industrial sector), with Córdoba and Entre Ríos at the forefront of the protests. Feletti responded by accusing grain profiteers of seeking to buy more apartments in Miami, pressing for further increases in export levies without being immediately supported elsewhere in the government. Opposition deputies and farming leaders are seeking to halt export taxation in Congress on the grounds that they are illegal in the absence of an approved 2022 budget, also taking this issue to court.
CHANGE AT UOM
The powerful UOM metal workers’ union last Tuesday had only its second change of helm in half a century when Antonio Caló, 75, secretary-general since 2004 when he was the successor of Lorenzo Miguel (1972-2004), was voted out by Abel Furlán from the Zárate-Campana branch in the Delta and reportedly closer to Kirchnerism than the outgoing leader, a more traditional Peronist.
ECONOMIC INDICATORS
INDEC statistics bureau released a batch of generally upbeat figures in midweek. Firstly, unemployment was announced as closing last year at seven percent as against 11 percent at the end of 2020 – critics however questioned the quality of jobs, pointing out that formal private-sector employment rose by only 7,000 jobs in that period to 6.02 million. Secondly, last month’s trade surplus was given as US$809 billion – the difference between exports of US$6.443 billion and imports of US$5.634 billion, even if the latter are growing faster. Finally, preliminary estimates of last year’s growth rate continue to point to a figure of 10.2 percent.
THE WEEK IN CORONAVIRUS
Face-masks were no longer compulsory in schools in this city and other parts of the country last week for the first time in over two years with most schoolchildren taking full advantage of the relaxation although Health Minister Carla Vizzotti continues to recommend their use indoors. Until last week only Mendoza had dropped the requirement. In further signs of a receding pandemic, health authorities are starting to give jabs against common flu the same importance as against Covid-19 as winter approaches. On Wednesday the official coronavirus death toll for the year 2020 was announced by Vizzotti – 53,259 as against the provisional count of 46,380. The minister also announced that those who had received Sputnik jabs and need to travel abroad can request a new non-Russian booster shot – a move inspired by the news that the World Health Organisation has paused its approval process for the vaccine, given the situation in Ukraine.
LOLLAPALOOZA RETURNS
The three-day Lollapalooza rock festival starting on March 18 made a successful return to Argentina for the first time since 2019 due to the coronavirus pandemic, drawing over 300,000 fans to hear more than 100 bands (including such internationally famous names as Foo Fighters and Miley Cyrus) in San Isidro last weekend.
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