Argentina's Finance Minister Hernán Lacunza will meet this month in Washington with representatives from the International Monetary Fund (IMF) to review the status of the country's massive loan programme, officials announced this morning.
That meeting will allow officials to discuss recent steps taken to stabilise the country's economy and shore up the currency, after the hit suffered following President Mauricio Macri's defeat in the PASO primary election last month. It come with Argentina awaiting the next US$5.4-billion disbursement of its US$57-billion stand-by agreement with the Fund. The country is currently gripped by recession and electoral uncertainty.
Lacunza "will come here in late September and we will have those discussions and decide on next steps and future discussions," IMF spokesman Gerry Rice told reporters.
Rice said Thursday said the institution was still in negotiations with Argentina, but noted that market conditions and political uncertainty had cast a cloud over the talks.
"The situation is still very difficult," he said. "The complexity of the market conditions and the persistent political uncertainty makes the situation even more difficult. That should be at the centre of the discussions when the minister comes this month," he added without giving a precise date.
To calm market turbulence, the government in late August asked the IMF to restructure its repayments on the record US$57-billion loan from the Washington-based crisis lender. The government has received about US$44 billion so far of the three-year loan approved in June 2018, but soaring inflation and rising poverty stirred outrage at the government's belt-tightening measures.
Macri's defeat at the hands of Peronist challenger Alberto Fernandez once again whipped up market volatility. Lacunza, who has been in his post barely a month, also announced initiatives to postpone debt payments to institutional investors, relieving the pressure on international reserves so they can be used to stabilize the currency which spiraled lower in the wake of the election.
Rice said that since mid-August Argentina has suffered a new crisis of confidence "that strongly affected macroeconomic stability."
“Our engagement remains strong with Argentina,” Rice told reporters. “The IMF’s objective has been to try and help the authorities stabilise the challenging situation and allow for a return of confidence that would pave the way for growth.”
Rice denied the IMF had violated any rules by once again providing financing to Buenos Aires. The Fund's role is to serve as a "lender of last resort" in crisis situations, which is "not without risks. Everybody recognises that," he said.
When Argentina called for IMF help last year it was "in the midst of an already very difficult situation." The IMF team has had discussions with Feráandez and is willing to do so again, Rice added.