You have already exceeded the limit of read notes.Register for free to continue readingAlberto Fernandez, Sergio Massa and Martin Guzman.Guzmán's decision surprised the president.To the point of provoking, first, his anger.He didn't expect it.As the minutes passed, while Cristina Fernández de Kirchner drew up a political analysis of the weaknesses of the administration, Alberto Fernández ordered a sounding out of a possible replacement for Guzmán.He asked Foreign Minister Santiago Cafiero.The name of two economists quickly came out of the president's mouth, but he dismissed the second.“I don't think he wants to,” he said.Anyway, he asked that the calls be made.A priori, until yesterday, the president's idea was to find a replacement.Even at first, sources say, he seemed to want to delay a decision for a few days.Then he became convinced that it was better to have something defined before the start of the markets on Monday.All the elements suggest a change that would not imply a major relaunch of the economic plan.Strictly speaking, the economic plan is that of the IMF and the Government took charge in the last hours of ratifying it.The President thinks of Sergio Massa.He is seduced by the figure of the tigress for a broader leadership within the Cabinet.He might be just the person to stitch up some strategic areas.Energy is clearly the most difficult.One of the epicenters for the resignation of Guzmán stayed there.In other words, taking advantage of the search for a replacement for the Economy chair, the Government could carry out a change in the architecture of a part of his cabinet at this time.Short castling, lateral moves and area jumps.It's not just about names.The axis is the chains of responsibility.Headquarters and areas of influence.If you think about it, what emerges as one of the records of the Casa Rosada's greatest weakness.The lack of coordination between the different areas of the Government, the vertical short-circuits, the commissioners in the different divisions of the State.Guzmán's departure put into analysis not only the vacancy of his area, but also of his areas of influence.Above all, as was said, energy policy and those responsible.Also the Central Bank.Secretaries and undersecretaries.In his resignation letter, Guzmán drew a kind of self-praise, showing himself, always, in time and place, in line with the challenges that the financial and economic agenda was supposed to impose.The political gesture, the public resignation on social networks while CFK made his speech in Ensenada, was a chosen gesture.There was one more element: the complete lack of self-criticism of Stiglitz's godson.From reading his letter, something interesting emerges: Guzmán is leaving because those who attack him politically do not understand his entire worldview.There is something important here.The president thinks the same way as Guzmán.He trusts that a decrease in the fiscal deficit will order the financial front and that will make the exchange rate gap reduce, with the consequent ordering of financial variables, the demand for pesos, investments in bonds, the decrease in country risk and inflationary pressures to the low.The reality showed that, in recent days, the economic plan in progress agreed with the IMF began to show difficulties in being fulfilled without using, paradoxically, heterodox accounting tools.And that the impact that the application of the central axes of that roadmap was beginning to have had begun to deepen the problem of inflation, that is, the erosion of wages.There is a strong brake on economic activity underway, due to the lack of foreign exchange and an inefficient administration of reserves.There is also an unfeasible exchange gap for anyone who intends to give signals from the Palacio de Hacienda.Both the fiscal front as well as that of inflation and the accumulation of reserves are experiencing critical times.The last week was generous in evidence.For this reason, it could also be said that perhaps, from now on, a historical time was coming that was probably going to force Guzmán himself to renegotiate, or erase, everything that made up his agenda in these 30 months.A balance, a balance, could present it to Guzmán leaving an inflation that is projected around 70% per year, an exchange rate gap of 100%, unusual reserves for the record liquidation that is registered and a big problem with the public debt in currency local from the distrust of institutional investors.Guzmán also leaves, in a way, turning his back on the IMF.Kristalina Georgieva had supported Guzmán despite criticism in the ruling coalition.But the interesting thing is that Guzmán gets out of that pact with the task done.Until the second quarter of 2022, Guzmán will be able to say that he complied with the program with the IMF.What happens in the third quarter will no longer be his problem, although he will have left the next minister with the commitment to comply, or not, with the international organization.But, what is the scenario that awaits the next minister?Until last week, without dollars, the Central Bank had two paths: either it adjusted by price, or it did it by quantity.While the entity led by Miguel Pesce chose the latter, those who needed more dollars in the last hours pushed, as a collateral effect, the first option.Therefore, they validated higher prices in the financial market.It is known: while the challenge is always to identify a cause, the effect identifies itself.The brand new restrictions of the Government took the financial dollar above $250 and the blue at $239.The question that will come back again and again is simple: Is this package of measures enough for the Government to start accumulating reserves?In just one week of harsh restrictions on imports, he managed to comply with the IMF in the accumulation of reserves, although on Friday Miguel Pesce had to give up some US$190 million.It would be unattractive to quote figures for the evolution of reserves in recent months.The same, of the arsenal of measures that were implemented.The skein always contains elements such as the swap with the People's Bank of China, the debt with the Bank of Basel, the IMF contributions and even the reserves on deposits in dollars.But suffice it to point out that from the first quarter of this year things got worse.The war in Ukraine deepened the debacle.The escalation in the prices of raw materials accelerated the processes.Did Miguel Pesce even use some dollars from the swap with China to pay for imports arriving from that country?Everything makes you think so.Was that the starting point to close the payment of imports?It is probable.Strictly speaking, a week before what actually took place, the BCRA had already thought about and consulted the idea of ​​reinforcing restrictions on imports, but Minister Daniel Scioli stopped the operation, asking for more time to be able to coordinate the size of the impact on the sector. .According to some sources consulted, what happened to Scioli was due more to a reverential fear of the eventual run on the dollar that the announcement could generate.With that extra week, former Minister Guzmán took the opportunity to carry out debt swaps of bonds that adjust for inflation and thus weaken the potential run.Later, he successfully tendered more issues, raised interest rates, and even the BCRA created a mechanism to indirectly intervene in the debt market and release the Common Funds.The result of all this movement was more monetary issue and a rise in the blue and financial dollar that, for the aforementioned officials, could have been even greater without the “financial containment” measures.What can be discounted is the higher forward inflationary pressure.As mentioned, until May imports were record.The news is that, despite the restrictions in the last week, June would have closed with a figure close to US $ 9,000 million.It goes without saying that only two registers (energy) explain almost 40% of the increase in imports, so the operation set up to manage the shortage will have to work hard to generate enough impact.Where an impact was seen in recent days was in the corporate sector.Many companies decided to put sales on hold for a few hours.In general, importing companies or those whose production has a large imported component did so.Some food.Others instead defined a price change, almost an automatic adjustment, a kind of average price between the official and the financial.That is why the meeting that Miguel Pesce will hold next Wednesday with businessmen from the food sector will be key.With the promise of sustaining the supply, the businessmen will look for the head of the BCRA to assure them of the foreign currency they need.There is an important detail.Something that locals and strangers look at.Although the Government met the photo as of June 30 of the BCRA's reserve goal agreed with the IMF in the second semester, there are still elements that allow for analysis.Let's mention two.The first, as a result of the 24% appreciation of the level of the Multilateral Real Exchange Rate carried out by the government of Alberto Fernández, there is already an almost 10% gap with respect to the commitment assumed with the IMF to maintain the levels of exchange competitiveness set in December 2021. In other words, if he wants to comply with Georgieva, Pesce should speed up the devaluation.The second element is more shocking: if you think about it carefully, the program signed with the IMF has already ceased to function as the government's macroeconomic guarantor.This is so because the three components of the agreement –accumulation of Net Reserves, the reduction of the fiscal deficit and the cut in financing to the Treasury in pesos– have lost all importance.This is one of the reasons why the country risk rises and the prices of sovereign bonds fall.And what can happen to the dollar?An obvious answer is that, for many items, the alternative of the new rule of accessing foreign currency from 180 days after dispatch to the market, forces them to demand foreign currency abroad or, probably, in alternative markets to the official one. , via MEP or CCL.Indirectly, this generates the demand for the “blue” dollar, whose gap with respect to the official one is stretched.It is this -and not another emerging- that must be observed and on which the Government cannot relax.A gap above 100% is a kind of judgment for any self-respecting economic cabinet.This is so because before being a statistic, it is a daily monitoring variable to interpret the degree of trust or distrust that exists in the economy.The content you want to access is exclusive to subscribers.The Minister of Economy resigned from his position and spread the letter on networks."With the deep conviction and confidence in my vision of the path that Argentina should follow," he said.The president of the BCRA denied the versions surrounding his departure from the Government after the resignation of Martín Guzmán and Raúl Rigo.The formal meeting with the representatives of the Paris Club was scheduled for next Wednesday, July 6.What is read nowThe Most ReadMEDIAKIT - JOURNAL FINANCIAL FIELD PAPERRATES - DAILY PAPER FINANCIAL AREAEditorial: redaccionweb@ambito.com.ar Subscriptions: suscripciones@ambito.com.ar // +54 9 11 4556-9147/48 or +54 9 11 4449-3256Director: Julián Guarino - Copyright © 2019 Ámbito.com - RNPI In process - Issn 1852 9232 All rights reserved - Terms and conditions of use