MercoPress. South Atlantic News Agency

Argentina requests waiver

Argentina formally requested the International Monetary Fund, IMF, to postpone one year repayment of a 2,8 billion US dollars loan that matures next September 9th.

The waiver was requested in a letter addressed this week to the IMF Board and signed by Economy Minister Roberto Lavagna.

The request follows the latest denial from the IMF that an agreement had been reached with Argentina, which should have opened the possibility of credit resumption to the financially strapped country.

However, IMF said both sides understand the problems that need to be solved and announced a new technical mission will be visiting Buenos Aires next week.

"Discussions are ongoing, but we haven't yet arrived to the point where we can discuss a calendar" to resume financial aid to Argentina, interrupted since last December, indicated IMF spokesperson in Washington Thomas Dawson.

"We have a good understanding with the Argentine government as to what we've requested", added Mr. Dawson.

Last week the Duhalde administration sent the IMF a draft of a letter of intent, however the multilateral organization demanded further information on certain issues particularly the monetary program.

"The mission will discuss the monetary program, since we believe it's necessary to work on a stable monetary anchor", said Mr. Dawson.

Mr. Stefan Ingves will be heading the mission together with John Thorton, responsible for the Argentine desk in the IMF, and who has previously visited the country.

"It's reasonable to expect that other issues will also be discussed with Argentine officials", said Mr. Dawson.

It was a particularly adverse week for the Duhalde administration that was expecting a positive reply from the IMF after eight months of discussions and the first symptoms of a possible recovery.

On the one hand the Supreme Court ruled the full restitution of the compulsory 13% reduction in salaries and pensions decided by the previous Argentine government in June 2001. The Court's decision endangers a relative stable budget that had been previously agreed with IMF officials, who are now demanding the government honour its word.

Furthermore IMF confirmed this week the 30 billion US dollars stand by assistance to Brazil, after all candidates for the coming October presidential election officially supported the continuation of the current open market policies of the Cardoso administration, particularly honouring the country's debt.

A clear message for the Argentine political system that last January during a cheering Congressional session, defaulted on over 100 billion US dollars.

If the IMF rejects the 2,8 billion US dollars credit repayment postponement, Argentina will be forced to appeal to its depleted international reserves, (below 9 billion US dollars), or a complete default, definitively isolating the country from the financial world.