MercoPress. South Atlantic News Agency

Lavagna to meet Snow.

Argentine Economy Minister Roberto Lavagna will be meeting this week with United States Secretary of the Treasury John Snow in Washington to “assess financial relations between both countries”.

According to Argentine sources Mr. Snow extended the invitation, which can be interpreted as a specific support for Mr. Lavagna who is currently leading talks with the International Monetary Fund to reach a three years agreement that will not include fresh funds but rather a postponement of repayments until 2006.

The announcement was done during an improvised press conference in the Palermo grounds, hosting Argentina's main agricultural show, when Mr. Lavagna accompanied by World Trade Office Secretary General Supachai Panitchpakdi made an unexpected visit.

Mr. Lavagna said that the Argentine camp "had played a leading role in the country's economic recovery", adding that the improvement begun "in the interior with the impact reaching the province of Buenos Aires last September/October".

However responding to demands from farmers to eliminate export commodities taxes Mr. Lavagna said that they will be implemented "once we gradually have the anti evasion, anti elusion, tax package in place".

During the current talks with the IMF delegation in Buenos Aires headed by John Dodsworth, it was revealed that inflation below 10% for 2003 is demanded and beginning next January Argentina will adhere to an "inflationary target" policy. That is monetary expansion will be regulated by the inflation target, similarly to how the Brazilian Central Bank has been operating for the last three years.

Argentine Central Bank officials believe the 10% target for 2003 is achievable in spite of having originally estimated 15%.

"In spite of the many uncertainties, we believe the final inflation figure will be closer to 5% than 15%", underlined Argentine Central Bank sources.