IMF approval is imminent, allowing a disbursement of $5.5 billion to Argentina

Before the end of the week and before Christine Lagarde stops directing the International Monetary Fund (IMF), it is estimated that the technical mission of the international organization will approve the fourth revision of the Argentine economy that will allow a new disbursement of US $5.5 billion.

Lagarde herself, when she met with President Mauricio Macri in the framework of the G20 in Japan, beyond reiterating the Fund’s support for the economic stabilization program in Argentina said that “the Argentine authorities and the technical team of the Fund are close to concluding their talks about the fourth revision of the stand-by agreement and I hope to present it to our Executive Board very soon.”

This Thursday is a holiday in the United States for Independence Day and that is why it is estimated that on Friday the decision of the IMF mission in Argentina would be known.

This is the third review of the economic evolution of Argentina under the stand-by agreement that allowed the IMF to turn around $10.8 billion, reaching the total disbursements up to that date of $38.9 billion.

On that occasion, Lagarde said that “the IMF-backed agreement is bearing fruit” while stressing that “the high fiscal and current account deficits are declining.”

Through a statement, he said the activity was showing “indications that the recession has hit bottom, and a gradual recovery is expected in the coming quarters.” However, he warned that ” inflation remains high; inflationary expectations are rising and inflationary inertia is difficult to fail.”

These three aspects in this review are showing better results and that is why a “go-ahead” is ruled out in the new IMF report on the country.


Mexico and Japan lead anti-corruption issue in the G20

The head of the Ministry of Finance and Public Credit (SHCP), Carlos Urzúa, reported on Saturday that Mexico and Japan led the debate against corruption during the meeting in Osaka of the Group of 20 (G-20), which integrates the largest economies in the world.

The official took stock of his participation in the G-20 work meeting, which was held for two days in the Japanese city of Osaka, and which he attended on behalf of President Andrés Manuel López Obrador together with Foreign Minister Marcelo Ebrard Casaubón.

Briefly, he indicated that he also participated in two sessions of presidents and prime ministers around which international trade is fluid, free and in principle has the least obstacles to growth.

In a joint press teleconference with the Foreign Secretary, Ebrard Casaubón, Urzúa explained that an issue related to the fight against corruption was addressed “and that comes as a ring to our finger.”

The head of the Federal Executive has insisted that corruption is the biggest problem we have to face if we want to be a more inclusive society, with economic growth and justice.

He mentioned that during the two days of the G20 meeting, he participated in a session on the global economy, emphasizing international trade situations, while a second was on the digital economy.

He also noted the importance of paying close attention to what is called the erosion of the tax base that is taking place in many countries.


Facebook fined for privacy violations

The Italian Privacy Authority fined Facebook for one million euros for the case of Cambridge Analytica which revealed the theft of personal data and the violation of the privacy of social network users.

This sanction is only the beginning, the Italian authority warned, which was based on the old Privacy Code, and remains available since last January with which the authorities had banned Facebook from continuing to use the data of Italian users of this network.

However, “new and stricter sanctions could be applied, in light of the rules of the General Data Protection Regulation,” effective since May 2018, said the president of the Guarantor Authority for the Protection of Personal Data.

The Cambridge Analytica company, based in London, that through an application of a psychological test had access to the data of more than 50 million users would have used them to try to influence the 2016 U.S. presidential elections, according to research.


Before Trump-Xi meeting, China asks the US to cancel sanctions against Huawei

The United States should immediately withdraw sanctions against the Chinese telecommunications equipment firm Huawei, said Gao Feng, spokesman for the Ministry of Commerce in Beijing, hours before the leaders of both countries meet to discuss trade.

China opposes US abuse of export controls and urges Washington to return to the path of cooperation, Feng said.

On Wednesday, US President Donald Trump said it is possible to reach an agreement with his counterpart Xi Jinping this weekend, when both are in the framework of the G20 summit in Japan, although he said he is willing to impose tariffs on almost all imports of Chinese products if the talks fail.

Trump has suggested that Huawei could be part of the agreement

Meanwhile, the newspaper The Wall Street Journal reported that Xi plans to present to Trump the terms to end the trade dispute, including the withdrawal of a ban on the sale of US technology to Huawei.

Trump is scheduled to meet with Xi in the Japanese city of Osaka, at 11:30 local time on Saturday.


Credit risk rating agencies warn that the “Fernández plan” for Argentine debt would be considered a default

In the midst of the electoral campaign, despite the lack of months for the presidential elections, the issue of debt once again raises concerns in the financial market. The oratory of some candidates (mainly from the opposition) is not music for the ears of investors.

Argentina, which was considered a “serial defaulter” by the world, could play again with fire. Although the specific plans are not known, Kirchnerism – with Cristina Fernández at the helm but recently with several definitions left by Alberto Fernández – is the political space that most fuses the idea of ​​a debt restructuring.

Will it be friendly or unilateral? It is not known. But the risk rating agencies, that is, the market players that note the bonds issued by the countries, are on high alert for the possibility that Argentina will again default on the debt.

“It is difficult to comment on what is said in the campaign. We will see what the winner does. But yes, any restructuring of debt with private bondholders is a default. Under our definition and that of ISDA, I don’t know if it’s what they propose or what they have in mind. Clearly, restructuring is making a default, but we’ll see what they do,” said Gabriel Torres, VP and senior credit officer of Moody’s.

Candidate for president, Alberto Fernández, spoke several times of raising some measure of waiting for private creditors. He knows that to extend the deadlines with the International Monetary Fund, he would need to commit to a series of structural reforms that he does not want to face. Nor can the Fund be defaulted. Hence the “adjustment variable” is the holders of private bonds.

Recently, Fernández prepared a document with Sergio Massa in which they commit to work on various issues as a result of the alliance they sealed. In one of them, they talk about debt treatment.

“The situation of violent financial instability, generated by over-indebtedness, should be addressed through broad agreements with creditors, which contemplate the need to guarantee an inclusive growth process as the only resource to meet external and internal commitments” , explains the platform approved by Massa and Fernández.