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ARGENTINA | 23-09-2019 15:48

Juan Luis Manzur: Argentina needs a mature relationship with IMF

Tucumán Governor Juan Luis Manzur says presidential hopeful Alberto Fernández is "a man of dialogue and consensus" who will honour Argentina's debt obligations.

With about a month to go before October's general election, one of the closest politicians to presidential candidate Alberto Fernández says the country needs to maintain a positive working relationship with the International Monetary Fund (IMF).

Tucumán Governor Juan Luis Manzur said that Fernández will honour Argentina’s debt obligations – while seeking to normalise the economy – by eventually rolling back capital controls imposed by President Mauricio Macri to stop the Central Bank’s bleeding of foreign reserves.

“We imagine a mature relationship, one that is strictly institutional and acknowledges the realities of what Argentina is going through,” Manzur said in an interview at Bloomberg’s headquarters in New York on September 20.

Fernández is “fundamentally a man of dialogue and consensus,” and is working with provincial governors, union leaders and business representatives to build a broad coalition, Manzur added.

The IMF is unlikely to grant a US$5.4-billion loan disbursement to Argentina until the policy objectives of the next government become clear, according to people familiar with the matter. Although the Frente de Todos hopeful has not yet outlined his economic policies, Manzur said a Fernández administration would seek “a new relationship” with the Fund.

Manzur, who won a second gubernatorial term on June 9, served as health minister under Cristina Fernández de Kirchner and later became governor in October 2015. He hosted Fernández in his home province on September 11 while on the campaign trail, which included an event with union leaders and a brief TV appearance together following a Fernández interview.

“The people of my province gave me a great responsibility, and I have to honour that responsibility,” Manzur said, referring to his governorship. But if asked to join a Fernández presidency, Manzur said, “I will stand with him.”

Ongoing recession

For the 50-year-old Peronist, building up production sector will be key in Fernández’s economic programme if he takes office on December 10. Manzur said that programme should begin with a monetary policy decision: lower interest rates. Argentina has had the world’s highest interest rates for over a year as it battles runaway inflation amid a currency crisis. The current benchmark rate, set every day through short-term debt auctions, finished Friday above 82 percent.

Manzur acknowledged that Macri’s policies have been a boon to the airline industry and have grown exports. Tucumán Province, a major exporter of lemons and blueberries, benefitted in 2017 when Macri resumed lemon exports to the United States after a 16-year hiatus.

But Manzur cited the ongoing recession and 10.6 percent unemployment rate in the second quarter as failures of the president's economic programme.

In a Fernández presidency, “the challenge we will have is to continue opening markets, continue adding value for producers, and in general improve infrastructure in order to be more competitive globally,” Manzur said.

by Scott Squires, Ignacio Olivera Doll & Jorgelina do Rosario, Bloomberg

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