Days after the Minister of Economy, Luis Caputo, published on his account on social network X that “there will be plenty of dollars,” a consultant for a member of Javier Milei’s Government raised a scenario of doubts about the entry of foreign currency into the country and suggested praying to some events that could or could not occur. The most relevant of them is that the election in the United States leans towards a victory for Donald Trump and that results in money for Argentina.At the same time, they discredit Caputo’s efforts at the International Monetary Fund (IMF) and blindly bet that the new Vice Minister of Economy, who arrived from Chile, will unblock disbursements.
The document, which was accessed Page I12 This is from the Bullmarket consultancy, owned by the economic advisor and Buenos Aires legislator for Libertad Avanza, Ramiro Marra. The text explains that “a shock of positive news for Argentina could occur in the next 120 days. But the outcome is still uncertain. During the fourth quarter we expect a series of positive news that could mean a shock.”
In one part of the work, sent to its clients, it is stated that “a historic victory for Trump” is an important alternative to see if dollars arrive. They admit that “While most pollsters give him a narrow loss, the two best pollsters that got the 2016 and 2020 results right (Rasmussen and Atlas Intel) give him the popular vote winner (which would imply a landslide victory in the Electoral College)”The problem with Trump is that, in addition to the polls that give Kamala Harris the win, the election is not only an enigma, but there was also a Trump advisor for the region who warned that a Republican victory will not mean a release of dollars. The reference is to the former IDB Mauricio Claver Carone, who assured that the record loan from the IMF to Macri was endorsed by a previous friendship between Trump and the PRO leader, something that does not exist with Milei.
Next, Bullmarket’s work diagnoses something incredible: that the Vice Minister of Economy could be more successful than Caputo himself if he tried to get dollars from the IMF. “The arrival of José Luis Daza as an intermediary with the IMF and foreign banks could be a trigger that accelerates an agreement with multilateral organizations, as well as a potential disbursement with banks. He comes with that objective”they point out. Daza, a Chilean-Argentine who has been advising the Chilean right wing of Antonio Kast and was a partner of the advisor Demian Axel Reidel in a fund in New York, boasts privately of having “fluid connections with the organization.” The truth is that Daza has not yet been named and the Fund does not confirm that he has particular knowledge of the issues with the organization.
REPO and money laundering
Last week, Caputo left a message on X that was heavily criticized for data that does not seem to be clear in the short term. “Things that are already happening and will increase in the coming months: inflation will fall, the economy will recover, taxes will fall, regulations will collapse, private credit will explode, the demand for money will increase, pesos will be scarce, dollars will be in excess, the financial dollar will converge with the official dollar, wages will recover, poverty will decrease.”the minister said.
In the Bullmarket document, the interpretation is that this depends, in reality, on many variables that are not at all certain. And, if they occur, they would not be immediate or as natural as Caputo expresses them. Marra’s consultancy cites two other points that could bring in dollars: the REPO with entities and an “extension of money laundering”.
The report notes that a “REPO with foreign banks for 4 or 4.5 billion. (That) It would cover all capital payments for January and July 2025, as well as January 2026.” The REPO is, technically, a repurchase agreement in which one of the parties sells an asset to the other, with the obligation to buy it back within a period of time and under certain conditions. As early as March 2023, when Massa was the Minister of Economy, this option had been considered to raise fresh funds in dollars.
In parallel, Bullmarket points out that Perhaps there will be “an extension of the money laundering until 31/12 (the tax package law gives the possibility of extending the money laundering up to three months, this would allow everything to be moved until 31/7/2025”They also add that “if the deadline is extended, we expect a dollar shock to the local market of up to 7 billion dollars.”
Marra’s consultancy also speculates on what these funds from the expanded money laundering could be used for, if they come to pass. “We believe that a large part will be invested in assets (ONS and bonds). If a quarter is invested, it is equivalent to several months of intervention by the BCRA in the sovereign debt market.”
Finally, they concluded that another of the bets that can be considered as possibilities is that “the market begins to price the possibility of entering into consultation to become emerging during 2025 and becoming effective in 2026. This would imply an exit from the toxic trap during the summer of 2025.”