Argentina’s financial program with the International Monetary Fund (IMF) will be on hold for some time as the nation grapples with severe political and economic uncertainty, the Fund’s Acting Managing Director David Lipton said an interview.
Christine Lagarde has defended the IMF decision to give Argentina a record credit line last year, even after the US$56-billion program fell short of stabilizing the nation’s troubled economy.
The International Monetary Fund has a tough choice to make in Argentina: unlock US$5.4 billion in funds under the country’s loan deal as the government strains to stave off default, or hold the money back and risk sparking more market panic.
Despite a history of many IMF rescue programs, Argentina once again faces a deepening financial crisis, raising questions about whether the Washington-based lender made a mistake in its dealings with Latin America's third largest economy.
Argentine presidential candidate and ex Economy minister Roberto Lavagna said that the country needs “a national unity government” to overcome the current situation and it's no option having to choose between “bad and worse”.
Argentine markets held steady on Wednesday, even as thousands of protesters took to the streets to demonstrate against the government of President Mauricio Macri and a darkening economic outlook in the recession-hit South American country.
The International Monetary Fund said it will stand by Argentina after the government authorized currency controls on Sunday in an about-face by President Mauricio Macri, who had previously lifted many protectionist practices of his predecessor, Cristina Fernandez de Kirchner.
Argentina will negotiate with holders of its sovereign bonds and the International Monetary Fund to extend the maturities of its debt obligations, as a way of ensuring the country's ability to pay, Treasury Minister Hernan Lacunza said on Wednesday.
The International Monetary Fund is analyzing the impact of a new debt plan announced by Argentina’s Treasury Ministry on Wednesday, an IMF spokesman said. IMF staff understands that Argentina has taken “important steps” to address liquidity needs and safeguard reserves, the statement by IMF spokesman Gerry Rice said.
By Héctor Torres (*) for Financial Times - Argentina went to the polls on Sunday to choose the candidates in the presidential election to be held on October 27. However, there were no competing candidates as all the main parties only presented one option.