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Central Bank of Argentina slightly accelerates devaluation of the peso pending agreement with the IMF

The central bank of Argentina This Tuesday, it allowed the peso to slightly accelerate its devaluation rate in search of cutting the exchange delay in the face of high inflation, at a time when signals are expected about a soon agreement with the International Monetary Fund (IMF)estimated operators.

Argentina reached an understanding with the IMF to refinance debt for more than US$40 billion, which implies quarterly reviews and an adjustment of economic variables, and which must be ratified by Congress.

“In the first two days of this week, the wholesale exchange rate rose forty-one cents, against a rise of twenty-eight cents in the same period of the previous week,” said Gustavo Quintana, operator of PR Corredores de Cambio.

Discrepancies in the ruling center-left coalition, which has not shown a uniform view of the deal with the IMF, renewed mistrust among investors and increased risk aversion.

Argentina “will receive US$ 5,000 million in 2022, as a return of what was paid in 2021 (to the IMF), which will be used to strengthen international reserves,” said Víctor Beker, director of the Center for Studies of the New Economy. (CENE) of the University of Belgrano.

He added that the Government “managed to refinance the total current debt with the agency for ten years. The IMF will gradually disburse (funds) over two and a half years, in quarterly installments and conditional on compliance with an economic program set for that period.

Analysts estimate that the net reserves of the monetary entity are in negative territory, when international reserves stood at US$ 37.212 million, according to the latest official data.

Source: Gestion

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