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Montevideo, November 15th 2018 - 19:37 UTC

IMF wants to wrap up talks to financially support Argentina “as rapidly as possible”

Friday, September 7th 2018 - 09:18 UTC
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“Progress is being made...on how to further strengthen the Argentine authorities' program, which is backed by the IMF,” IMF spokesman Gerry Rice said “Progress is being made...on how to further strengthen the Argentine authorities' program, which is backed by the IMF,” IMF spokesman Gerry Rice said
The Argentine Peso was up more than 1% against the dollar on Thursday, and Argentina's Merval stock index rose 4.1%, led by financial stocks. The Argentine Peso was up more than 1% against the dollar on Thursday, and Argentina's Merval stock index rose 4.1%, led by financial stocks.

The International Monetary Fund said on Thursday it aimed to wrap up talks to “strengthen” a US$ 50 billion backup financing deal with Argentina “as rapidly as possible,” as the country's peso and stocks climbed for a second straight day.

Late on Wednesday, Economy Minister Nicolas Dujovne said he had “enormous confidence” that Argentina would be able to reach agreement with the IMF on early disbursements from the US$ 50 billion standby loan, which was approved in June before the peso suffered a fresh bout of sharp depreciation last week.

A new deal with the IMF is seen as key to shoring up investor confidence in Argentina's assets, as the peso has weakened about 50% against the dollar this year, making it one of the worst-performing emerging market currencies.

“Progress is being made in those discussions, which are now continuing at the technical level, and again, on how to further strengthen the Argentine authorities' program, which is backed by the IMF,” IMF spokesman Gerry Rice told a regular IMF media briefing.

“What Madame Lagarde has said, is that we will be working to conclude as rapidly as possible,” he added, referring to IMF Managing Director Christine Lagarde. Rice said the talks included debt sustainability as well as “the potential of other forms of financing.”

The closely-watched talks continued for a third day on Thursday although Dujovne, who led his country's delegates at the start of the discussions, had returned to Buenos Aires as scheduled and left his team to hammer out details with the IMF in hopes of putting a deal to its board for approval this month.

The Argentine Peso was up more than 1% against the dollar in early afternoon trading on Thursday, and Argentina's Merval stock index rose 4.1%, led by financial stocks, while the country risk was down 2% to 729 points.

But on Thursday also, thousands marched in downtown Buenos Aires to protest new belt-tightening measures announced by President Mauricio Macri on Monday to pave the way for a new IMF deal. The measures include eliminating government ministries, deep spending cuts and new taxes on exporters.

Carrying signs that said “Macri=Hunger” and “Enough Cuts!” protesters, many members of union and leftist organizations, demanded Macri abandon talks with the IMF.

Top Comments

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  • Enrique Massot

    The Macri government hasn't been able to fulfill the first part of the agreement with the IMF because the first $15 billion have already run out. What the story calls “early disbursements” is also bound to rapidly be exhausted in debt payments which have now become a significant percentage of the country's budget.

    Both Macri and the IMF know that the government's parroted “deficit zero” will be soon gone the same way Macri's “poverty zero” promise was gone before. Recession is already hitting before even the measures are applied.

    In the meantime, Macri and his “best team of the last 50 years” has discovered the virtues of the “Cared for prices” selected list of basic household items that were under price control during the CFK government -- just a few days after announcing a return to taxing agri-food exports.

    Give Macri a few more days and he may come back to implementing controls stopping capital flight.

    Sep 08th, 2018 - 03:17 am -2
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