news

BUENOS AIRES, June 25 (Reuters) - Argentina, the International Monetary Fund's long-term problem child and biggest debtor, once again needs to seek forgiveness: this time for falling short on foreign currency reserve build-up targets linked to a new $20 billion deal.

The South American country is likely to get it, too, analysts and former officials said. Argentina struck its latest deal - its 23rd - with the Washington-based lender in April, needed to help roll over an earlier $44 billion deal and give the government of libertarian Javier Milei financial firepower to undo capital controls.

The front-loaded deal came with economic targets attached to unlock further funds, including on inflation and rebuilding depleted central bank foreign currency reserves, that were deep in the red when Milei took office in late 2023. Milei has tempered inflation with tough austerity and guided the country out of a recession, but accumulating dollars has proven tough, leaving levels short of those demanded by the IMF.

However, former government and IMF officials said that Milei had done enough to gain some leeway, with his cost-cutting having overturned years of deep fiscal deficits, winning over markets and gaining plaudits from IMF leaders.

"I think they will forgive them even if they (the IMF) then ask for more later," Claudio Loser, former IMF director for the Western Hemisphere, told Reuters.

That would likely come in the form of a waiver, approving the first program review despite missed targets on reserves. An IMF team arrived in Argentina on Tuesday for that review.

Daniel Marx, former Argentine finance secretary from 1999 to 2001, told Reuters that the next disbursement - some $2 billion - would require the IMF to give special dispensation.

"Most likely, the disbursement won't be automatic, but it will require a waiver," he said.

"It was thought that the central bank would have intervened by accumulating reserves. This hasn't happened, at least until now."

The Ministry of Economy and presidency did not respond to a request for comment. The central bank declined to comment and said talks with the IMF technical team were just starting. The IMF pointed to a statement about its team arriving in Argentina.

Key to the waiver is Milei's strong record on the fiscal surplus with his tough "deficit zero" drive. Last week the government said it would deepen cost cutting in order to hit a surplus target of 1.6% of GDP.

Minister of Economy Luis Caputo said earlier this month reserves accumulation was no longer as important as before with a freer float for the peso currency and the central bank better financed. He flagged IMF backing for Milei's reforms.

Aldo Abram, director of the Fundación Libertad y Progreso in Buenos Aires, estimated that the country might be $500 million to $1 billion below the agreed reserves target, but it shouldn't block new funds being disbursed.

"That won't cause major problems for the Fund," he said. "I think forgiveness (the waiver) will be approved quickly and the disbursement may take a week or two."

Montevideo, Jun 23 (Prensa Latina) The authorities of the Ministry of Social Development (Mides) are today on alert due to the freezing temperatures and the death of several homeless people.

This capital city dawned with temperatures below zero degrees Celsius and Mides in a communiqué indicated that “the existence of an emergency situation regarding homeless people has been determined”.

The communication indicates that “in a few months 32 new shelters have been opened and the number of places in the system has been increased by more than a thousand”.

The text emphasizes that this expansion is “the largest ever carried out in a Winter Plan” and “has guaranteed the entry into the system of all the people who requested and accepted a space since April 25, the date on which the Plan was brought forward”.

The Mides teams have called on the health services on more than 150 occasions for the evaluation of the pertinent medical intervention and the eventual hospitalization of people in the open", he points out.

The text refers to the implementation of “new exceptional measures” including the operation of night and contingency shelters on a 24-hour basis in several places of the country.

It refers to the agreement with the Ministry of the Interior for police cars to alert the Mides base team or the Emergency Medical Care System about the presence of people on the streets in situations of obvious health difficulties.

Strengthening of the base teams of the Street Program, with new technical teams and ministerial authorities in the task of capturing street people.

These measures are in addition to the start of operations of the “Open Doors” centers, belonging to the Community to the Street Plan, new spaces for early reception, with a focus on neighborhood work and follow-up through itinerant teams in different areas of Montevideo.

Together with Mides, other institutions are participating, including municipalities, the Ministries of Health and Defense.

In the last three days, three people living outdoors in various parts of the country have died.

Brasilia, Jun 29 (Prensa Latina) Brazilian ex-president Jair Bolsonaro returned today to the emblematic Paulista Avenue in Sao Paulo, where he called for amnesty for those convicted of coup episodes, but it turned out to be a deflated act, without people and without epic.

According to local media, what should have been a demonstration of force against the Supreme Federal Court (STF), ended up looking more like a family reunion and not exactly numerous.

One of the arguments most repeated by supporters to explain the lack of attendance at the demonstration was that, at the same time, the popular Flamengo was playing (lost 2-4) against the German Bayern Munich, in the round of 16 of the Club World Cup being held in the United States.

"That affected the presence, of course it affected. Brazilians love soccer," justified federal deputy Sóstenes Cavalcante, of the Liberal Party (in which Bolsonaro is a militant).

To compound the hangover, the Public Policy Group for Access to Information at the University of São Paulo released attendance estimates based on drone and camera image analysis.

The result? Some 12,400 people, a very modest figure even for a neighborhood fair, far below the number of participants at the previous event in February.

Such a contrast did not go unnoticed. The social networks exploded in memes and even so, the former president did not lose heart.

In his speech, he again called for amnesty for those involved in the assault on the Three Powers on January 8, 2023, described the trial against him as “fumaça de coup (coup smoke)” and said that “it was all staged by the left”.

He also blamed President Luiz Inácio Lula da Silva for “not being in Brasilia”, when his extremist supporters invaded and ransacked on that date the headquarters of the National Congress, the STF and the Presidential Palace to hinder the rise to power of the former labor leader.

The organizers tried to make up for the low attendance by talking about a “more symbolic” act.

In his attempt to keep the epic alive, Bolsonaro promised that, if in the 2026 elections the right wing achieves 50 percent of the Congress, “we will change the destiny of Brazil”, although for now it seems difficult to fill even half of the square.

The final scene of the event was led by a man wearing a Brazilian national team jersey, who, when asked why there were not more people, answered without hesitation: "Flamengo is Flamengo, isn't it?

Meanwhile, the trial for attempted coup d'état continues at the STF, in which the former Army captain is involved.

And so, among other people's goals, windless flags and recycled harangues, Bolsonaro's mobilization this Sunday ended up losing by a landslide.