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ECONOMY | 27-08-2020 02:30

Government formally opens debt rescheduling talks with IMF

Government formally opens talks with IMF over new terms for repayment of record US$57-billion bailout agreed in 2018 by Macri administration.

The government formally opened consultations with the International Monetary Fund on Wednesday to agree new terms on the repayment of a US$57-billion bailout agreed in 2018.

President Alberto Fernández spoke with IMF chief Kristalina Georgieva "to begin negotiations aimed at reaching a new understanding with the organisation," the Casa Rosada said in a statement.

"This morning I had an extensive talk with the head of the IMF, and we agreed that slowly, but surely, we will get to work to sort out the disorder we inherited from the previous government and the Fund," said the Argentine leader. 

"To achieve certainties, we must put the accounts in order. We will put the accounts with international organisations in order. My conversation with Kristalina Georgieva encourages me to think that we will do so with a common logic: that of not putting Argentina on hold and not causing more suffering to those who have suffered so much, "he added.

In a statement later released by the Fund in response, Georgieva said the Peronist leader had "notified me of the request by his government to start discussions on a new IMF-supported programme."

After talks she described as "very constructive and positive," she said "we stand ready to play our role,"

"We look forward to deepening our dialogue on how we can best support the government's efforts to manage the impact of the pandemic, jumpstart growth and job creation, and reduce poverty and unemployment while strengthening macroeconomic stability for the benefit of all Argentines."

Fernández told Georgieva of the need "to work together with the IMF to sort out the disorder that we inherited from the previous government" of his predecessor in the Pink House, Mauricio Macri.

The president put repayments to the Washington-based lender on hold and renounced outstanding tranches of the bailout when he assumed the presidency last December, saying Argentina already had enough debt. In total, Argentina has received US$44 billion from the Fund.

Argentina "to a great extent, has already put its accounts in order with its creditors and will start working today to do so with the international credit organisations, especially the IMF," Fernández said in a statement.

Earlier this month, the government reached a deal with three major creditor groups to restructure a US$66-billion debt after months of strained negotiations and missed deadlines. The deadline to join the debt swap proposal, which received strong backing from the IMF, is next Friday, with results due the following week,.

The bonds represent roughly a fifth of the country's US$324 billion debt, which amounts to around 90 percent of GDP.

Later Wednesday, Economy Minister Martín Guzmán and Central Bank Chief Miguel Pesce formally sent a letter to the IMF, inviting a mission team from the Fund to visit the country soon to begin talks and carry out "an accurate assessment of the challenges" facing Argentina. Repayments to the IMF are due to begin in September 2021.

– TIMES/AFP

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