Friday, July 19, 2024

ECONOMY | 26-03-2021 10:02

IMF and Argentina find common ground amid CFK's bombshell remarks

Argentina and IMF coordinate messaging on principles that could underpin country’s programme, a day after Vice-President Cristina Fernández de Kirchner put the deal in doubt.

Argentina and the International Monetary Fund coordinated messaging Thursday on the principles that could underpin the country’s programme with the lender, a day after Vice-President Cristina Fernández de Kirchner put the deal in doubt.

In a statement, IMF negotiators Luis Cubeddu and Julie Kozack said they found “common understanding” with Economy Minister Martín Guzmán on areas such as inflation, exports and developing domestic capital markets. Guzmán reiterated these points in a series of tweets too, after meeting with IMF officials Wednesday in Washington.

The unified communication came after Fernández de Kirchner stated Argentina can’t repay the IMF the US$45 billion the nation owes it from a previous programme. Neither Guzmán’s ministry nor the IMF has addressed Fernández de Kirchner’s comment.

The IMF’s executive board also conveyed broad support Wednesday to increase its special drawing rights for members by $US650 billion. That translates into an extra US$4.4 billion for Argentina, according to the government.

Still, it’s increasingly unlikely that Argentina could reach an agreement with the IMF by May as initially stated. Talks have made no visible progress since Guzmán completed a restructuring with private creditors last August. The IMF hasn’t conducted an extensive look at the economy, known as an Article IV review. President Alberto Fernández says he doesn’t want to rush negotiations either.

On the issues, both sides agreed that inflation in Argentina is a multi-faceted problem that requires consistent economic policies and coordination to anchor expectations. Increasing value-added exports is another priority both sides agreed upon. The IMF also noted the importance of private investment to sustain growth in Argentina.

by Patrick Gillespie, Bloomberg


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