Since the electoral setback, the market has been anticipating the government’s next moves. The ruling party’s hyperactivity has been contained for weeks. But not much is expected to be decided, and soon. The IMF Board has begun moving to address the Argentine issue. A date has already been set on the agenda for the first informal meeting of its members: December 5.
Although the review of the program with Argentina will not take place until January, in preliminary conversations that took place in recent days between staff and the Board of Directors, it became clear what issues concern the credit organization, of which Argentina is the main debtor. The International Monetary Fund assumes that Argentina will request and obtain a waiver (amnesty) for not achieving the goal of accumulating international reserves stipulated in the agreement, which had to undergo its first review last July. Under the agreement, the country was supposed to record negative net reserves of $3.1 billion by December. Today’s calculation is very far from that: Consulting firm 1816 estimates net negative reserves at US$16 billion.
December can allow you to reduce the distance with the goal somewhat, since people’s seasonal demand for pesos usually increases (due to holidays, bonuses and other factors). The Treasury can buy foreign currencies without worrying too much about the impact the pesos it sends to the department could have on prices. But even taking into account that the government could accelerate in the coming weeks direct purchases of dollars – from companies and provinces issuing debt abroad, or even as a result of the demonetization of the dollar – the reality is that until now the Treasury’s movements in the exchange market have remained almost unnoticed. On Tuesday of this week, the Treasury ended the day down $37 million and then bought Just $45 million the next day, and another $50 million on Thursday. coins.
Hence, the International Monetary Fund intends to confirm at its next meeting Argentina needs to reverse this trend. For the organization, the accumulation of reserves is the only guarantee that Argentina will have the necessary means to meet its debts. That is why, according to sources familiar with the talks, the Council insists that the government must propose a “sustainable” monetary and exchange rate plan. Today, despite the calm following the October elections, The majority of the market believes that the government will have to do something soon. Maybe not in December, but sooner rather than later.
It is true that the International Monetary Fund has begun to lose more and more of its relative weight in the decisions taken by Argentina. In the era of Trump, the United States has the stick. A sign of this is that The IMF Board also submitted a request to the North American Treasury for details of the assistance provided to Argentina in the midst of the electoral race. The International Monetary Fund is still awaiting a response.
These are details that do little to improve Argentina’s internal reputation among employees and board members. They tell a story in Buenos Aires: that in the time of Mauricio Macri, when the current Western Hemisphere Director of the International Monetary Fund, Briton Nigel Chalk, was also playing a leading role in negotiations with the country, he chose an image of Diego Maradona’s “Hand of God” to illustrate his WhatsApp group in which officials involved in the Argentine case participated. And it wasn’t specifically a tribute to Diego. If not we should remember that the country specialized in flouting the rules (and getting away with it). Will it happen again? To keep up with the times, they should now, more than Diego, put Trump on the IMF’s WhatsApp. Beautiful!
In fact, Miley will meet the US President again next week. Trump personally invited Miley to the presidential balcony where they will witness the draw of groups for the 2026 World Cup. The liberal will also take the opportunity to speak in front of the US Chamber of Commerce, where it has already been confirmed that there will be an ideal attendance of partners. After the election, Miley regained all his appeal in the business community.
Although the alliance with the United States and Israel is indisputable, Argentina is testing rapprochement with China. If Trump reaches out to Xi Jinping, Argentina can do so too, that’s the logic. The new Foreign Minister, Pablo Cuerno, recently visited the Chinese ambassador to the country, and once again the government has started talking about a possible official trip in the first half of the year. The swap (loan) provided by the Bank of China to the central bank will expire in mid-2026: it does not seem that far-fetched. This is not the first time this administration has flirted with a trip that it ultimately does not take. But, again, intention is at least allowed to override.
More conflicting is Argentina’s association with its main Mercosur partner, Brazil. Paraguayan President Santiago Peña asked his country to postpone the signing of the Mercosur-European Union agreement, which Brazilian President Lula da Silva had stipulated to be held on December 20 in Brasilia. Peña, who will take over the bloc’s interim presidency in January, wants to postpone the event until 2026, in order to take the crown. It’s all a matter of ego. But Argentina, in principle, could support his proposal. They are the three members most ideologically linked to Mercosur, which Bolivia now joins. Yesterday, for his part, Peña came out to officially support the candidacy of Argentine Rafael Grossi for the United Nations Secretariat on the social media network X. One of lime and one of sand.
In addition to the disbursement and cash issue, the market expects a definition by the end of the year regarding the management of liabilities that fall due in the first days of 2026. Talks continue with banks to provide the loan. Informed sources also confirm that there are banks abroad that are in contact with potential debt operations in the market. As they point out, however, in order to move forward, it is first necessary to approve the 2026 budget. Hence the importance of approving the law immediately after the start of the extraordinary elections in December. Time is running out.
In the private sector, there is great concern about the completion of knowledge of the extent of the reforms that the government promised immediately after its victory in the elections. Labor market reform is perhaps the reform that has been worked on the most within the Mayo Assembly, but it is also the reform that may be reached with the least amount of consensus. There is no doubt that profound changes in the employment system are needed. Although mining promises to be the largest growth activity in the coming years – if financial conditions permit – it is not an activity that can be absorbed. The number of vacancies that will begin to leave the industry. According to the Minister of Mining’s own estimates, the sector could directly employ about 25,000 workers. The industry in Buenos Aires Province employs just under 500,000 people.
There is one point on which unions will not be willing to surrender no matter what, and that is the commitment that currently governs union contributions. “The CGT never agreed on anything, but we believe that it will later concede many things except this amount,” explained one of the people who came to participate in the talks. The Group of Six, which includes Argentina’s main business entities – the Argentine Industrial Union (UIA), the Argentine Rural Association, the Argentine Chamber of Commerce (CAC), the Chamber of Construction, the Stock Exchange and the Association of Argentine Banks (ADIBA) – He intends to submit a document containing additions to the document that will end up being proposed in the Council. Ultimately, what matters is what the government decides to send to Congress. Encouraged by the legislative coalitions that have been forged in recent weeks, the idea now aims to move forward toward a proposal that is a little more ambitious than originally thought. What they do not hide in the ruling party is that pragmatism will prevail at all times. At the end of the day, the important thing is to show results.