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Macri holds a 'constructive meeting' with IMF, but no news about the pending tranche of a major loan

Wednesday, September 25th 2019 - 09:54 UTC
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President Macri, together with Treasury minister Hernan Lacunza and central bank chief Guido Sandleris met with IMF acting managing director David Lipton  President Macri, together with Treasury minister Hernan Lacunza and central bank chief Guido Sandleris met with IMF acting managing director David Lipton
Lacunza, Lipton and Sandleris. Lacunza, Lipton and Sandleris.

Argentine President Mauricio Macri met with his International Monetary Fund backers in New York on Tuesday, but there was little light shed on whether the body was likely to approve a key US$ 5.4 billion tranche of funds to the indebted country.

Macri met with IMF Acting Managing Director David Lipton at Argentina’s Mission to the United Nations, his first face-to-face with the organization in the United States after a sharp market crash in August pushed Latin America’s No. 3 economy toward default.

Also present were Argentine Treasury Minister Hernan Lacunza and central bank head Guido Sandleris, who are in the United States for crunch talks with the IMF about the status of a US$ 57 billion credit facility agreed last year.

Macri, who struck the IMF deal, was badly defeated in a presidential primary in August, a surprise result which sparked the market sell-off. He is widely expected to lose to Peronist challenger Alberto Fernandez in the Oct. 27 general election.

Lacunza told reporters outside the talks that the decision over the next tranche of funds was in the IMF’s hands, but that “it was clear” Argentina had complied with its fiscal and monetary commitments under its IMF financing deal.

He added that an Argentine technical mission would meet with the IMF in Washington the week of Oct. 14.

The green light for the latest portion of funds was expected this month, but has been delayed amid concerns over Argentina’s economic woes, with many expecting the IMF to wait until the political outlook becomes clearer.

The IMF’s Lipton said in a separate statement that the meeting was “constructive” and the Fund would continue working with Argentina to respond to the country’s “difficult situation and the challenging times ahead.”

The August market crash led Argentina to burn through US$ 16 billion in foreign reserves to help stabilize its currency, with Macri also imposing capital controls. The country announced plans to renegotiate foreign and local debts.

IMF support is key for Argentina, whose jittery markets have been temporarily stabilized ahead of the October election. Strains, however, are starting to appear beneath the surface. Withholding the funds could spark renewed concerns about Argentina’s ability to pay off its debt.

Lacunza and Sandleris will be in Washington on Wednesday as part of talks with the IMF that began in Buenos Aires in August, and which Lacunza’s office has called “continuous and fluid.”

Meanwhile president Macri after delivering his speech before the UN General Assembly is flying back to Argentina to continue with the presidential election campaign scheduled for the end of October.

The International Monetary Fund’s Acting Managing Director, Mr. David Lipton issued the following statement on Argentina following the Tuesday meeting:

“I had a constructive meeting with President Mauricio Macri, Finance Minister Hernán Lacunza and Central Bank Governor Guido Sandleris today. We discussed the efforts that Argentina has made under this program and their positive impacts. The recent measures by the authorities have helped calm the markets. I expressed our intention to continue to engage with the authorities, and help them respond to the difficult situation and the challenging times ahead.  Our dialogue and close collaboration with the Argentine authorities will continue with technical meetings expected to take place later this week and before the IMF annual meetings.”

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