A spokesperson for the International Monetary Fund said on Tuesday that Argentina’s latest debt offer to its creditors is “an important step” in the restructuring process.
The IMF hopes all parties involved will work towards reaching an agreement in a timely fashion, the spokesman said in a statement, following Argentina’s latest offer which was formalized with the U.S. Securities and Exchange Commission
After months of often difficult negotiations, Argentina over the week end made a new offer to creditors that stands a solid chance of anchoring one of the largest sovereign debt restructurings in the history of emerging markets.
By potentially lifting a big cloud hanging over the country’s ability to grow solidly and inclusively — directly for the government’s finances and indirectly by improving prospects for private sector activity — such an orderly and collaborative resolution could help overcome long-standing economic challenges that have recently been worsened by Covid-19.
Inheriting a troublesome situation in December, the newly elected government of President Alberto Fernandez embarked on negotiations with creditors. The aim was a restructured stock of debt and re-profiled service payments consistent with attaining Argentina’s elusive goal of growing rapidly and inclusively enough to lift citizens out of poverty, unleash the economy’s enormous human and resource potential, and stop what has been a depressing multi-decade fall in international economic standing.
The process has been far from smooth, reflecting the inherent structural complications, as well as self-inflicted difficulties. The government has had to deal with multiple creditor groups that lack natural cohesion, making the negotiations tricky and time-consuming. Conditions on the ground were shifting as the global Covid-19 outbreak posed a direct threat to lives and required more resources to be devoted to health care. The pandemic also had multiple negative spillover effects from the rest of the world, including lower export demand and commodity prices, less tourism, and, initially, very unstable global capital markets. Further complications arose from a premature offer in April and the inevitably noisy internal political discourse.