Latest news with #ElianaRaszewski
Yahoo
19-05-2025
- Politics
- Yahoo
Argentina's Milei wins show of support in Buenos Aires election
By Eliana Raszewski BUENOS AIRES (Reuters) -Argentine President Javier Milei's government received a show of support on Sunday as his candidate took the lead in a legislative election in the city of Buenos Aires. With nearly 96% of polling stations counted, Milei's list of candidates led by his spokesperson Manuel Adorni was leading the results for the local legislature with 30.14% of the votes. Leandro Santoro, who had been the favorite in most polls and is aligned with the Peronist movement of former president Cristina Fernandez de Kirchner, was trailing with 27.3% of the vote. In third place with nearly 16% of the vote was Silvia Lospennato, the candidate from the PRO party, a former ally of Milei that is now competing with Milei for leadership of the center-right. Sunday's election for half of the 60 seats in the capital's legislature was seen as the first important electoral test for Milei, a libertarian who took office in late 2023. His administration had sought to frame Sunday's local election as a referendum on his government's national economic achievements, touting his success in bringing down inflation and securing the country's first budget surplus in 14 years last year, said Mariel Fornoni, political analyst at the consulting firm Management & Fit. "That's the government's main asset," said Fornoni. The outcome in Buenos Aires is considered an important step and indicator leading up to the national midterm elections in October.
Yahoo
12-04-2025
- Business
- Yahoo
What economists say about Argentina's FX reforms and IMF deal
By Lucila Sigal and Eliana Raszewski BUENOS AIRES (Reuters) - Argentina's central bank has announced a major overhaul to the country's exchange rate policy, unleashing the peso and years-long controls on the currency ahead of an expected $20 billion International Monetary Fund deal. The central bank announced that it will undo a fixed currency peg from Monday, letting the peso freely fluctuate within a moving band. Here is what economists have to say about the policy changes and the IMF loan program, the country's 23rd in a long and complex history between Argentina and the lender. CLAUDIO LOSER, EX-IMF WESTERN HEMISPHERE DIRECTOR "I must say I am surprised by the amount of money at Argentina's disposition starting next week, approximately $20 billion." "Eliminating the CEPO (currency controls) is important, though it does not mean everyone can take out their money. What's more important is that the dollar will fluctuate, there will be fluctuation. People will be very nervous." RICARDO DELGADO, ECONOMIST "This is a devaluation, different from what the government would have wanted ahead of the elections... Lifting the CEPO is striking at this time of global volatility." MARTIN REDRADO, ECONOMIST AND FORMER CENTRAL BANK HEAD "There will be a limit to what the central bank will be able to invest in the upper part of the band. The IMF will surely set a limit that we may or may not be aware of, but that the market will put to the test." AGUSTIN ETCHEBARNE, HEAD OF FREEDOM AND PROGRESS FOUNDATION "Uncertainty will diminish and that's a positive thing." "This will help to strengthen the central bank... That is good news and it will allow inflation to continue decreasing in the mid-term to much lower levels than we currently have." JAIME REUSCHE, MOODY'S VP - SENIOR CREDIT OFFICER "The $20 billion agreement with the IMF is an important anchor that will help Argentina prepare for the next phase of its adjustment, which involves the elimination of the currency controls and capital controls." "Argentina's credit outlook remains positive, although navigating the current global environment in the context of the planned macroeconomic adjustment will be more challenging for the authorities."
Yahoo
08-04-2025
- Business
- Yahoo
Analysis-IMF 'mountain of dollars' key to unlock Argentina's FX controls
By Eliana Raszewski BUENOS AIRES (Reuters) - Argentina's pending $20 billion deal with the International Monetary Fund will bring libertarian President Javier Milei the tool he wants to unlock investment-blocking capital controls and a return to the global market: a "mountain of dollars". The South American country, a serial defaulter that has battled on-and-off economic crisis for decades, is in advanced talks with the IMF over what would be its 23rd program, aimed at bolstering the country's depleted foreign currency reserves. A deal would give the government leeway to start dismantling currency controls in place since 2019, while the IMF's backing could help cut the premium Argentina has to pay to take on new debt, potentially re-opening access to global capital markets. "What you'll have is a mountain of dollars," Milei said in March, referring to a target of doubling gross reserves to $50 billion with the IMF loan and others. He targeted year-end for undoing FX controls, or sooner if the IMF sped up payouts. "The currency controls will no longer exist on January 1. Maybe sooner," he said. Reuters spoke with former IMF and government officials, and economists, who generally agreed that the IMF deal - which still needs board approval - would help undo capital controls and access capital markets, though it wouldn't happen overnight. That's key for the grains-to-lithium producer to revive its embattled economy as it drags itself out of one of its worst ever crises under a tough austerity push by Milei, a bombastic economist allied with U.S. President Donald Trump. Annualized inflation neared 300% last year, net reserves plumbed to negative $11 billion and poverty hit above 50% as the country fell into recession. Those metrics are now improving, but the economy remains brittle. "A guarantee from the Fund gives the government a certificate of good conduct," said Claudio Loser, former IMF director for the Western Hemisphere, adding this would boost investor confidence and help keep a lid on inflation. "Country risk could decrease, and then the government could approach the financial markets." TAKING ON MORE DEBT? Milei took office in December 2023 pledging to take a "chainsaw" to state spending to overturn years of fiscal deficits. This has stabilized the economy and brought inflation down sharply. There are signs the economy is turning around, but pressure has risen on the currency and reserves have slid in recent weeks. Martin Guzman, a former economy minister with the Peronist bloc that opposes Milei, said that the risk of a new deal was that the funds would simply be used to firefight the slide in the peso, eventually leading to greater debt loads. "The positive aspect of a new agreement would be the refinancing of the IMF debt, which begins to mature in September 2026. The negative aspect is more debt," Guzman, who sealed a $44 billion IMF deal as economy minister in 2022 replacing a failed 2018 program, told Reuters. He added it was "highly unlikely" currency controls would be lifted soon because it would allow global firms to pull out an estimated $9 billion that had been stuck in the country, pressuring the exchange rate and inflation. Pablo Guidotti, former deputy minister of economy under Milei icon Carlos Menem in the 1990s, said, however, that a deal would give more clarity about the long-term FX regime, boost market access, ease debt loads over the next four years, and "pave the way for the elimination of exchange controls". "Ultimately it allows us to return to the capital market... which will have a very positive impact on the Argentine economy," he said. Sign in to access your portfolio
