The draw on Argentina's reserves (counting reserves borrowed from the IMF and other parts of the official sector) in the last 12ms of data is really quite large. $45 (~10% of GDP).
(November will be a bit different with tighter controls)
1/x
(November will be a bit different with tighter controls)
1/x
Not totally sure I trust the split (cannot quite get it to map to the BoP) --
But the BCRA's monthly data on drains on Argentina's fx suggests about half the outflow was from the withdrawal of external credit, and about half from resident capital flight.
2/x
But the BCRA's monthly data on drains on Argentina's fx suggests about half the outflow was from the withdrawal of external credit, and about half from resident capital flight.
2/x
For better or for worse, that kind of outflow could only be sustained over the last year because Macri's government received a lot of credit from the IMF and others once price inflows dried up --
Which now has left a real overhang.
3/x
Which now has left a real overhang.
3/x
The BoP tells a similar story -- tho the last data point is older (end q2). Portfolio inflows (from the global bond market) soared and then tanked. And the current account adjusted more slowly (note the data lags, it is now close to in balance)
4/x
4/x
Preventing an even more brutal adjustment tho took its toll on Argentina's balance sheet. Thanks to the IMF's lending from q1 18 to q2 19, external debt continued to rise, with Argentina adding close to a third of its current GDP in new external debt in last 4 or so years
5/x
5/x
The good news, if there is any, is that if resident capital flight slows substantially and all maturing external bonds are pushed out, the bulk of the needed external adjustment has now taken place.
6/x
6/x
But letting the current account deficit blow out to $35b (funded mostly with fx debt) back when goods exports were (after the global soybean price adjusted back in 14) under $70b has proved very costly to all involved.
7/7
7/7
