Saturday, April 20, 2024

ECONOMY | 26-11-2019 19:29

Fernández says he won't seek remaining US$11 billion from IMF

President-elect says he will not seek disbursement of the remaining US$11 billion of Argentina's record US$57-billion credit-line with the International Monetary Fund.

President-elect Alberto Fernández said Tuesday he would he will not request the remaining US$11 billion of Argentina's record US$57-billion credit-line with the International Monetary Fund.

"I don't know if the [remaining] money from the deal will come," he said in an interview with Radio Con Vos on Tuesday.

"What I want is to stop asking [for money] and for them to let me pay," said Fernandez, who takes office on December 10.

"I have an enormous problem. And I'm going to ask for 11 billion [dollars] more?

There was no immediate response from the IMF.

In recent days, the IMF named a new head of mission in Argentina, to replace the outgoing Roberto Cardarelli.

The Italian official's replacement in Buenos Aires is Venezuelan Luis Cubeddu. The 53-year-old has experience of Argentina, having worked in the country between 2002 and 2004.

According to reports, Cubeddu has come across Fernández before, when the president-elect served as cabinet chief for then-president Néstor Kirchner.

The return to power of protectionist Peronists has raised fears of yet another debt default, and eroded the peso's value.

The poverty rate has risen to more than 35 percent, inflation for the year to September was at almost 38 percent, while the peso has depreciated 70 percent since January 2018.


The Frente de Todos leader said in the interview that his goal is "to revive the economy in order to pay and solve the debt problem sensibly."

"If you have a problem, because you are in debt, do you think the solution is to continue borrowing?" he added.

Argentina's economy has spent the last 20 months in recession. According to IMF estimates, economic activity will decline by 3.1 percent this year.

Debt under the Mauricio Macri administration has grown by around US$100 billion and now exceeds 90 percent of gross domestic product, according to international organisations. When President Macri took office in 2015, debt stood at 38 percent of GDP.

Last week, Fernández told IMF Managing Director Kristalina Georgieva that he would seek a "sustainable" solution to both Argentina's debt with the multilateral lender and private bondholders. 

Bloomberg reported Tuesday that the president-elect's team would seek to hold simultaneous negotiations with both parties in a bid to find a better solution.

The IMF suspended the release of a US$5.4-billion disbursement in September following the government's failure to meet inflation targets. 

"We want them not to lend us more money, but to let us develop. Let's discuss the time I need to develop, but don't give me more money," said Fernández.

The president-elect has insisted his government would not default but rather seek to renegotiate the terms of the IMF loan, and sought to reassure voters in last month's election that their bank deposits would be safe under his administration.

"It's like a guy who drinks a lot and is a little drunk. The solution is not to continue drinking. The solution is to stop drinking," he told the radio station.

Argentina has around US$28 billion in debt held by private investors and international organizations that will mature in 2020, Treasury Minister Hernán Lacunza said this week.

While Fernández has, for the most part, shied away from giving details about his future Cabinet officials, he did confirm Tuesday that Marco Lavagna will head the INDEC national statistics bureau.

Speaking to local news channels, the Frente de Todos leader said it was "expected" that Lavagna – the son of ex-presidential candidate and former economy minister Roberto Lavagna – would take up the position.

INDEC was a source of controversy under the previous government led by Fernaández's vice-president-elect, Cristina Fernaández de Kichner, after it became subject to political pressures that put in doubt the credibility of official data. 



More in (in spanish)