IMF to start negotiating new Argentine lending deal over coming weeks
Argentina will start talks with the International Monetary Fund in the coming weeks aimed at clinching a new program to replace a defunct $57 billion standby lending deal from two years ago, a top IMF official told Reuters on Saturday.
- Country:
- Argentina
Argentina will start talks with the International Monetary Fund in the coming weeks aimed at clinching a new program to replace a defunct $57 billion standby lending deal from two years ago, a top IMF official told Reuters on Saturday. In 2018, Argentina received the biggest lending package in IMF history in an ill-fated bid to halt a slide in the local peso currency. About $44 billion of the allotted cash has been paid out so far.
"Within the next few weeks Argentina plans to formally request the initiation of conversations for a new program that would succeed the derailed and cancelled 2018 program," said Sergio Chodos, IMF executive director for the Southern Cone. "There is no stringent deadline for the conclusion of the upcoming talks because the calendar of maturities of principal owed to the fund does not start until Sept. 21, 2021. So the discussion process can be well thought out," Chodos said in a telephone interview.
New lending from the IMF will not be part of the upcoming accord, he added. The government has had to renegotiate about $65 billion in bonds as the country sinks into what is expected to be a 12.5% recession this year. "We stand ready to support Argentina, including engaging with the authorities on a new IMF-supported program when the authorities so desire. However, at this stage no request has been made," a fund spokesman said in an emailed statement.
The government is talking with undecided bondholders about supporting a sovereign debt restructuring deal it reached several days ago with key creditors groups. The government had said it would finalize the bond restructuring before setting out to revamp its IMF agreement. Argentina's previous government ran into a cash crunch two years ago after President Mauricio Macri's austerity drive, which included cuts to energy subsidies, jacked-up electricity bills paid by businesses. Vendors increased consumer prices to help cover their rising energy costs, fueling inflation.
The foreign direct investment that Macri promised would be attracted by his market-friendly policies never materialized. Macri was voted out of office last year and succeeded by Peronist Alberto Fernandez, who has vowed not to impose fiscal austerity while the country grapples with the fallout from the coronavirus pandemic.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)
- READ MORE ON:
- IMF
- Argentina
- Alberto Fernandez
- COVID-19
ALSO READ
BRIEF-AstraZeneca Says Imfinzi Improved OS & PFS In Limited-Stage SCLC
Eight per cent growth projection for India not ours: IMF
Health News Roundup: AstraZeneca's Imfinzi shows promise in treating aggressive lung cancer; US FDA issues warning letters to retailers against underage sale of ZYN nicotine pouches and more
World Bank asks Pakistan to adopt National Fiscal Policy amid bailout talks with IMF
President Wickremesinghe calls for legalising agreements with IMF