April 28th, 2023


1. Appreciation of the dollar and measures to curb the currency

The last week saw an increase in the dollar rate in the informal market (blue dollar). With a gap of almost 110% versus the currency’s rate in the official market, the blue dollar rose $70 in 15 days. In view of this situation, the nation’s Minister of Economy Sergio Massa announced a series of measures aimed at curbing appreciation of the currency. The government’s economic team will travel to Washington to meet with the International Monetary Fund in order to restructure the existing agreement and request a possible advance disbursement of US$12.6 billion. At the same time, the government will continue with multilateral agreements such as the one reached with China to pay for imports in yuan, as well as a criminal investigation into financial market activities and the analysis of operations related to money laundering together with the Financial Information Unit (UIF) and the National Securities Commission (CNV). For its part, the Central Bank of Argentina (BCRA) intervened by selling dollars to satisfy the import demand and raising the interest rate and the yield of fixed-term deposits.

Clarín: Sergio Massa apuesta todo: le ruega al FMI un pulmotor financiero
Twitter: Sergio Massa

2. Agreement with China to pay for imports in yuan was celebrated

The Minister of Economy of the Nation, Sergio Massa, together with the Chinese Ambassador, Zou Xiaoli, celebrated an agreement between the two countries that will allow Argentina to pay for Chinese imports in yuan, extending the availability of the currency swap that both countries signed in 2011. This measure will make it possible for imports “to stop weighing on the outflow of our dollars and become part of the outflow of yuan from the good use decided by the governments of China and Argentina for the promotion of the swap, which is centrally the strengthening of bilateral trade,” said the Minister. Within this framework, they also celebrated the agreement with Argentine companies, the ICBC Bank (Industrial and Commercial Bank of China), the People’s Bank of China and the Central Bank of the Argentine Republic, to “reschedule the payment instrument for more than $1.04 billion for this month of imports from China.”

Página 12: Sergio Massa anunció que Argentina empezará a pagar importaciones en yuanes

3. The Government incorporated new regional economies to the “Dólar Agro”

On April 10, the Government made official the third Export Increase Program (PIE), better known as “Agricultural Dollar,” in order to benefit exporters of agri-food products affected by the drought. The “Dólar Agro” establishes a value of AR$300 for the currency to those who commercialize products of the soybean sector and regional economies, allowing them to receive higher income for the exported goods. In order to access the benefit, regional economies must comply with requirements such as participation in “Fair Prices,” the official price agreement program. Since its launch, different sectors have been included in the PIE, such as wine, olive, fish and wool production, as well as the production of vegetables, sorghum, sunflower, derivatives of vegetable chains, apples, pears, rice and potatoes, among others. Thus, numerous types of production were recognized as regional economies, setting an important precedent for future measures.

El Economista: Agricultura incorporó 65 productos de las economías regionales al dólar agro

4. INDEC published the Poverty Index and the Monthly Economic Activity Estimator

The National Institute of Statistics and Census (INDEC) this week published the new Poverty Index report with data for February 2023. The Monthly Economic Activity Estimator (EMAE) grew just 0.2% compared to the same month of last year and registered nearly zero change compared to January in the seasonally adjusted measurement, as reported today by INDEC. Compared to the same month of 2022, nine sectors that make up the EMAE registered increases in February, among which Mining and quarrying (+11.1% y/y) and Hotels and restaurants (+8.6% y/y) stand out. The Mining and quarrying sector had the highest positive impact on the year-on-year variation of the EMAE, followed by Real estate, business and renting activities (+2.1% y/y). On the other hand, six sectors declined in the annual comparison, with Fishing (-20% yoy) at the forefront. These sectors subtracted 0.5 percentage points from the year-on-year variation of the EMAE.

INDEC: Estimador mensual de actividad económica. Estimación preliminar de febrero de 2023

5. Government approves CAF financing for the Néstor Kirchner Gas Pipeline

Decree 230/2023 approved a Model Loan Agreement with the Andean Development Corporation (CAF) for US$540 billion. The loan is aimed at partially financing the Reversion Project of the North Gas Pipeline Complementary Works to the President Néstor Kirchner Gas Pipeline (GPNK), which is intended to transport natural gas to the provinces of northern and central Argentina. This type of work is important because of the impact it will have on reserves due to the savings that will be generated by energy exports. The execution and use of the loan resources will be carried out by the Ministry of Economy, through the company Energía Argentina (Enarsa). Sergio Massa announced that the bidding process for the second section of the GPNK will be launched immediately after the inauguration of the first stage, and that the private sector will be encouraged to participate.

Ámbito Financiero: El Gobierno aprueba financiamiento de la CAF por u$s540 millones para el gasoducto