Monday, February 26, 2024

ARGENTINA | 29-09-2018 12:32

Sept. 24th-30th: What we learned this week

A round-up of some of the most notable stories from the last seven days.


A new agreement with the International Monetary Fund was announced on Wednesday at the Argentine consulate in New York by IMF Managing Director Christine Lagarde and Treasury Minister Nicolás Dujovne. In the agreement, the IMF tops up June’s US$50-billion package by US$7.1 billion with various new conditions such as a managed float for the currency and freezing the money supply (alongside zero fiscal deficit). The agreement eases debt service for this year and next but only US$5.8 billion of the package will remain for 2020 and 2021. (See more on Pages 4 & 5).


The dollar closed the week on 41.90 pesos, continuing to rise after closing Thursday at around 40.40 or 90 cents up on the previous day. The final rise for the week was 4.10 pesos for yesterday from the previous Friday, a huge percentage of the total September rise of 4.40 pesos. But the closing figure still stayed short of the 44 pesos which would justify Central Bank intervention, according to Wednesday’s agreement with the International Monetary Fund (IMF). Meanwhile Argentine shares in New York sustained their negative reaction to that agreement for the second day running, falling around eight percent. Nor was there good news nearer home – Argentine dollar-linked bonds, whose initial reaction to the agreement had been bullish, fell by up to 1.7 percent yesterday. Country risk again moved above 600 points, closing the week on 623 points from Thursday’s 593. The Central Bank is reportedly poised to raise statutory reserve requirements, already at 41 percent.


The City Federal Appeals Court on Thursday confirmed the trial of former Attorney-General Alejandra Gils Carbó for irregularities in the purchase of the offices for her department although it toned down the malfeasance charges against her, also lowering the lien on her assets to 1.2 million pesos from the seven million imposed by Federal Judge Julián Ercolini. The charges rest on the payment of a three-million-peso commission to the brother of one of her officials as a middleman. He will also be tried along with three other co-defendants.


The ‘notebooks’ graft case took on a new twist last Tuesday when Federal Judge Claudio Bonadio summoned two big businessmen for next month – Pablo Rocca of Techint and Marcelo Mindlin of Pampa Energy. Techint has admitted to being forced into paying bribes over its Venezuelan steel plant but claims that these were channelled through the executive Luis Betnaza (already on trial), not Rocca. Mindlin has a long history of business ventures usually involving governments, the latest being the purchase of IECSA construction company (in trouble over its partnership with Brazil’s Odebrecht) from President Mauricio Macri’s currently indicted cousin Angelo Calcaterra. Meanwhile, two former private secretaries of ex-president Cristina Fernández de Kirchner, Julio Alvarez and Fabián Gutiérrez, were arrested on Wednesday in Río Gallegos on the orders of Federal Judge Claudio Bonadio.


Central Bank Governor Luis Caputo made an abrupt exit from the monetary helm last Tuesday – all the more surprising for the timing (since it overshadowed President Mauricio Macri’s United Nations General Assembly appearance in New York the same day while also a delicate moment at home with the CGT general strike) than for the departure itself, since he had strong differences with the IMF over Central Bank intervention. He is replaced by academic Guido Sandleris, close to Treasury Minister Nicolás Dujovne and part of his team since he entered public life last year. The change smoothed the way for the IMF agreement the following day and country risk closed Tuesday below 60 points. (See more on Page 5).


Tuesday’s general strike called by the CGT umbrella labour grouping was predictably successful nationwide thanks to the adherence of public transport. From New York, President Mauricio Macri called the stoppage futile while the government rejected all the CGT demands apart from accepting that collective bargaining could be renewed at sectorial level. CTA leader Pablo Micheli sparked controversy by saying: “Either this model falls or this government goes,” prompting Security Minister Patricia Bullrich to call the trade unions anti-democratic. The protest is estimated to have cost the country almost 21 billion pesos from a lost day’s production.


President Mauricio Macri used his 10-minute address to the United Nations General Assembly on Tuesday to take aim at two of the pet targets of his United States colleague Donald Trump – Iran and Venezuela. Macri said that he would be denouncing the latter to the World Court in The Hague for human rights violations while pressing the former to extradite current and former officials suspected of being involved in terrorist bomb destruction of the AMIA Jewish community centre in 1994. Macri did not forget to press Argentina’s claims to the Malvinas but made little or no mention of either domestic issues or his current G20 chair status. In his two-day stay in New York Macri also gave various interviews in which he strove to give an upbeat image to overseas investors despite the current crisis, ruling out default and predicting smooth passage of his zero deficit 2019 budget.


Judge Pablo Tejada on Thursday ordered the Courier firm OCA to be placed under court trusteeship at the request of AFIP tax bureau complaining of tax arrears amounting to five billion pesos as well as asset-stripping. The company is formally owned by Patricio Farcuh but strongly linked to Hugo Moyano. The court placed a lien of 400 million pesos on OCA assets.

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