Dienstag, 28. November 2023
Montag, 27. November 2023
Milei off to US for talks with IMF, WB, and Biden's administration
Milei off to US for talks with IMF, WB, and Biden's administration
Milei and his sister Karina attended a Jewish religious ceremony in Buenos Aires on SaturdayArgentina's President-elect Javier Milei left Sunday evening for the United States to meet with officials from the Joseph Biden administration and creditor organizations such as the International Monetary Fund (IMF) and the World Bank (WB), it was reported in Buenos Aires
En route to these engagements brokered by US Ambassador Marc Stanley, Milei will make a stopover in New York, during which he will attend to spiritual matters of his own with some rabbi friends.
Joining Milei's entourage were Luis “Toto” Caputo, who will reportedly become Economy Minister on Dec. 10, and Nicolás Posse, the future Cabinet Chief. Also traveling were Milei's sister Karina and advisor Santiago Caputo.
On Saturday, the Milei siblings participated in the Havdalah, a ceremony separating Shabbat from the rest of the days that make up the week, in the Buenos Aires neighborhood of Balvanera. In New York, they plan to visit the tomb of Menachem Mendel Schneerson, known as “the Lubavitch Rebbe,” who was the rabbi and founder of the Chabad Lubavitch Hasidic current. He died in 1994 in New York and is considered miraculous. Milei's press team said that he would ”give thanks for the place that HASHEM (God) has given him“ and then hold work meetings in Washington.
After a brief stopover, Milei is due in Washington DC on Monday where he will be welcomed by Juan Gonzalez, director of the US National Security Council for the Western Hemisphere. Milei's agenda in the United States, which will last until Tuesday, also includes talks with officials from the State Department and the Treasury Department. ”They would be introductory meetings at a technical level to generate common synergies and to understand how we would work together in the future,“ Stanley explained.
The president-elect defined the United States and Israel as priority ”allies“ of his future government.
Regarding Toto Caputo, a former Finance Minister under President Mauricio Macri, Milei has insisted ”there is no greater financial expert in Argentina” than him. Hence the President-elect's choice for the Economy Ministry which, nevertheless, remains to be officially confirmed.
Caputo, who does not entirely share Milei's views on closing the Central Bank (BCRA) or dollarizing the economy, will have an urgent agenda with Wall Street investors and bankers. The priority for the next administration will be to avoid hyperinflation. The first measure will be to call for extraordinary parliamentary sessions to have a State reform bill passed to cut down expenditures.
”In order to avoid hyperinflation, it is key to dismantle the Leliqs (Liquidity Bills, the Central Bank's debt with the banking system, for which it pays an effective interest rate of 253% per annum), which also allows opening the “cepo” (stocks, or local jargon for exchange rate controls),“ Milei said last week. For this, ”I need someone who has an expert financial wrist; there is no greater financial expert in Argentina than Luis Caputo.“
Regarding the suppression of the BCRA, Milei insisted that ”we never said“ it ”was going to be instantaneous.“
In a meeting with local businessmen last week, Caputo announced there would be no immediate dollarization or closing of the BCRA, and ratified a strong adjustment through ”a fiscal and monetary anchor“.
”Dollarization cannot be a tool to stabilize the economy and the first thing that is needed is a stabilization plan,“ said Caputo. Stabilization entails ”an orthodox road map, with a fiscal and monetary anchor“, with a starting point that will reach a cut of 2 GDP points. Once this objective is achieved, dollarization ”is a tool“ that may or may not be used, albeit never in the short term.
Caputo also pointed out that he was not against dollarizing the economy. ”In fact, my relationship with Javier Milei started when I wrote him a report on dollarization, which is a plan that can solve some problems,“ he pointed out.
”Dollarization is a good debate“ once the macroeconomic situation is stabilized, he stressed.
Unlike his chosen course of action in the Macri years, Caputo admitted ”there is no room for gradualism“ this time around. But he also sought to downplay fears of past adjustment experiences in Argentina: ”There will be no surprises or disruptive measures,“ he underlined, meaning there would be no debt reprofiling, no asymmetric dollarization, nor a total lifting of the cepo on the first day of government, as Macri did in 2015.
Also traveling with Milei is businessman Gerardo Werthein, who could become Argentina's next ambassador to the United States. Werthein owns an important holding of companies in Argentina operating in the insurance, telecommunications, financial markets, and agricultural production markets.
Milei last week told IMF Managing Director Kristalina Georgieva ”to find the solutions that Argentina needs.“
”Today I had an excellent conversation with the director of the IMF, Kristalina Georgieva, in which we talked about the great economic challenge that our country is facing,“ said Milei on X. He also said he discussed with Georgieva ”the different aspects of our fiscal adjustment plan and our monetary program.“
Georgieva replied on the same social network that ”the important challenges for Argentina's economy and the decisive policy actions needed“ were reviewed.
”The IMF is committed to supporting efforts to durably reduce inflation, improve public finances, and increase private sector-led growth,” she added.
Freitag, 24. November 2023
Donnerstag, 23. November 2023
glückwunsch
New York Court Gives Blessing on Venezuela Bond Standstill
- Creditors moved for court’s endorsement of the deal in Oct.
- Agreement suspends statute of limitations on bonds until 2028
The National Assembly in Caracas, Venezuela.
Photographer: Carlos Becerra/Bloomberg
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A New York court backed a legal move by holders of Venezuela’s defaulted bonds on Wednesday to protect a debt standstill agreement.
New York Supreme Court Judge Andrea Masley said on Wednesday that she agreed on the terms of a deal between Venezuela’s opposition-controlled National Assembly, recognized by the US as the country’s sole legitimate institution, and holders of the country’s defaulted bonds. The deal cements a so-called tolling arrangement suspending the statute of limitations on the debt until 2028 to avoid a flood of litigation.
The decision follows a legal maneuver by a group of investors with more than $10 billion of sovereign and state oil company bonds aimed at ensuring that the extension to debt deadlines can’t be later challenged by a new Venezuelan government. Although the action was entered by a group of over 30 fund managers and trustees of PDVSA bonds, all bondholders are benefited from the results.
Read More: Venezuela, Creditors Seek Court Blessing of Bond Standstill
“The judge’s order provides an important additional layer of protection,” said Richard Cooper, an attorney at Cleary Gottlieb Steen & Hamilton who represents creditors in this action. “It also shows that bondholders can act cooperatively with Venezuelan authorities.”
While the Nicolás Maduro administration offered to toll the statute back in March, the decision wasn’t enforceable because his government is not formally recognized by the US. Nearly five months later, the opposition-led National Assembly offered the same terms: a unilateral agreement that urges bondholders not to sue the country. The decision was quickly backed by some creditors.
Although Venezuela notes still trade at deeply distressed levels, prices jumped after the Biden administration decided to lift sanctions last month on secondary trading on the country’s debt. Sovereign notes due in 2027 are now at around 18 cents from 10 cents under the trading ban, according to traders. PDVSA bonds maturing in 2026 jumped almost five cents to 11.5 cents in the same period, according to Trace data.
— With assistance from Claire Boston
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