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ECONOMY | 05-10-2020 10:07

IMF team heads to Argentina with Fernández seeking deal ASAP

President Alberto Fernández says he’s seeking an agreement with Fund “as soon as possible,” in order to "clear up any doubts.”

Set against a backdrop of swelling tension in exchange markets and devastating poverty statistics, a mission team from the International Monetary Fund (IMF) will arrive in Argentina on Tuesday as debt restructuring talks with the government enter a new crucial stage.

Speaking in an interview over the weekend, President Alberto Fernández said he hoped to reach an agreement with the IMF to refinance its US$44-billion credit line "as soon as possible."

"I have had many conversations in this time with Kristalina Georgieva," Fernandez told local daily Clarín, referring to the IMF chief. "I have the impression that she sees better than anyone the difficulties that exist in Argentina."

The Peronist leader said an agreement with the Washington-based crisis lender is "basically necessary to give the economy predictability."

An understanding "clears up many doubts, which I do not have, but that some sectors of the economy do," he said.

"What I hope is that we continue working as well as we have done up to now, that we can find quick answers to the concerns they have and that we can reach an agreement, a programme as soon as possible," he added.

Upon assuming the presidency last December, Fernández put repayments on hold and renounced outstanding tranches of the bailout, saying Argentina already had enough debt.

 

Restructurings

After defaulting on its debt in May for the ninth time in history, Argentina in late August reached a deal with foreign creditors to restructure US$66 billion in debt after months of tense negotiations, giving it US$37.7 billion in relief.

Once a deal seemed assured, the government formally opened consultations with the IMF to agree new terms on the repayment of a US$44-billion bailout loan agreed in 2018. The loan, signed in 2018 with the Mauricio Macri administration, was originally worth US$57-billion.

After the deal was signed, Economy Minister Martín Guzmán said the next step will be to reach an agreement with the IMF quickly over a new credit programme.

The IMF announced in late September that it will carry out a mission on Argentina's debt restructuring, after talks on a new accord resumed last month.

The mission will be composed of western hemisphere deputy director Julie Kozack, mission chief for Argentina Luis Cubeddu and the IMF's resident Argentina representative Trevor Alleyn, according to the Fund.

IMF spokesperson Gerry Rice said last week that officials would be “in listening mode” initially.

Argentina's troubles have been exacerbated by the coronavirus pandemic, with more than 40 percent of the country's population of 44 million now living in poverty. 

Inflation stands at roughly 40 percent annually and the IMF expects Latin America's third largest economy to shrink 10 percent this year. Private estimates anticipate a steeper contraction, close to 12 or 13 percent.

 

– TIMES/AFP

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