IMF Managing Director ‘Madame (Christine) Lagarde’ had words of support for Argentina’s position in the dispute with ‘vulture’ (hedge) funds during an informal encounter with Argentine officials on the sidelines of the recent G20 summit in Russia.
A group of Argentine sovereign defaulted bond-holders have blasted the IMF for its announced intention of filing an amicus brief in support of Argentina before the US courts stating that “there is no role for direct involvement by the IMF in this matter” and any intervention by the IMF “favouring Argentina's request would also clearly violate the Fund's strict commitment to neutrality”.
The International Monetary Fund trimmed its global growth forecast for the fifth time since early last year due to a slowdown in emerging economies and the woes in recession-struck Europe. In its mid-year health check of the world economy, IMF also warned global growth could slow further if the pull-back from massive monetary stimulus in the United States triggers reversals in capital flows and crimps growth in developing countries.
Argentina's economic activity expanded 2.6% in March from a year earlier and 0.7% over February, the national statistics institute Indec said on Friday. Accumulated growth in the 12 months through March was 1.3%, down from 1.9% in full-year 2012.
Argentina which the IMF censured for underreporting inflation less than three months ago after three warnings over the past two years, last week authorized the deposit of 400 million dollars with the Washington-based lender to increase the nation’s access to emergency cash.
The International Monetary Fund (IMF) stated on Wednesday that both financial and banking sectors in Latin America “should keep their guards up” before the recent and fast growth of the credit, though the lender doesn’t see any overheat of the region’s economy.
Official inflation in Argentina increased 1.1% in January compared to the previous month, Indec national statistics bureau reported on Friday. The hike in prices was led by transport as train and bus fares increased by 6.1%. The annualized rate jumped to 11.1%.
Argentina’s central bank reported that at the end of January it had reserves totalling 42.65 billion dollars which is the lowest level since President Cristina Fernandez took office in December 2007. At the time the central bank international reserves totalled 46.2 billion dollars. Only in April 2007 were reserves at a lower level, 38.6bn dollars.
Following Friday’s IMF ‘declaration of censure’ on Argentina because of the lack of reliability in its inflation and GDP stats, and the country’s first reaction virtually describing the Fund as mother of all financial evils, Minister of Economy Hernan Lorenzino announced a new ‘national’ Consumers Prices Index to be implemented in the course of this year and which will replace the current GBA-IPC.
Argentina became the first country censured by the International Monetary Fund for not sharing accurate data on inflation and economic growth under a procedure that can end in expulsion. The declaration of censure was adopted Friday by the IMF 24-member board of directors and even if it doesn’t have immediate effects, the decision takes the country a step closer to sanctions that include barred access to IMF loans.