MercoPress. South Atlantic News Agency

IMF to Send Loan Team to Argentina

The International Monetary Fund announced Friday that it planned to send a negotiating team to Argentina for discussions on short-term loans following a meeting next week of the agency's executive board.

The IMF issued a brief statement saying its 24-member executive board would review Argentina's progress in implementing economic reforms at a meeting next Wednesday.

"Following that discussion, a fund mission is expected to travel to Buenos Aires to pursue discussions with the authorities on their request for a short-term (loan) program with the IMF," agency spokesman David Hawley said in the statement.

On Dec. 20, the IMF announced that it had agreed to consider a transitional lending program for Argentina that would provide the debt-strapped nation with enough money to repay existing loans but would withhold consideration of a bigger financing package until after presidential elections in the spring.

The short-term loans will prevent the country from going into default to the IMF, an action that would cut off the country's last resource for foreign support.

For most of 2002, the IMF rolled over loan payments coming due from Argentina, but under its rules it cannot extend those payments for a second year. The first loan ? for about $1 billion ? that the IMF will not be able to roll over will come due on Jan. 17.

Argentina has already defaulted on some payments to the World Bank and the Inter-American Development Bank. The Bush administration has said it hopes the country, which is suffering through the worst economic crisis in its history, will use the new IMF loan to clear up those debt defaults as well as keep current with obligations to the IMF.

In December 2001, the IMF refused to extend further loans to Argentina, forcing the country to default on the bulk of its $141 billion in foreign debt, the largest government default in history.

Talks over resuming the IMF loan program have dragged on for months, with Argentine officials contending that the agency was being too tough on its demands for economic reforms and IMF officials insisting that Argentina had to make tough decisions to implement a program that would put the country's economy back on the right track.