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ECONOMY | 15-08-2020 11:00

IMF: Argentina has not yet requested new financing programme

President Fernández says in interview that he will not allow Fund to impose austerity measures as part of a new financing programme.

President Alberto Fernández says he will not allow the International Monetary Fund (IMF) to impose austerity measures on Argentina during talks over a new financing programme. 

The government, which sealed an initial US$65-billion debt agreement with private foreign creditors last week, is looking to open formal negotiations with the Fund after September 4 over repayments for Argentina’s US$44-billion credit line, according to official sources. 

However, IMF Spokesperson Gerry Rice said this week that Argentina had not yet requested a financing programme.

“I would reiterate the Argentine authorities have not requested Fund financing, at this stage. They have not requested an IMF programme, at this stage,” he said. 

“I can say that it does not have to be necessarily tied to an Article IV consultation,” he added. “If and when such a request were to occur, the financing associated with a new IMF supported programme would be to help Argentina meet its balance of payments needs, including those related to its official sector obligations.”

Argentina took a loan of US$57 billion from the IMF in 2018 – the Fund’s largest ever – under former president Mauricio Macri, though President Fernández said he did not want to receive the remaining disbursements upon taking office. 

The government is seeking to seal a deal before the end of March 2021, officials have briefed, with the first repayments currently due to begin in late December.

 

‘No conditions’

Given the coronavirus pandemic and Argentina’s economic turmoil, the country is not in a position to accept any conditions from the IMF, Fernández said Tuesday in a radio interview. 

"I am not in a position to accept any conditionality. I am not in a condition because Argentina is not in condition to," said the Peronist leader.

"I ask them to trust us because we cannot accept conditions that require us to make adjustments [austerity measures], though we know that we must fulfil our obligations," he added.

The Peronist leader nevertheless praised the support the IMF had given Argentina during its negotiations with bondholders. 

"If the Fund said, as it was, that the debt is not sustainable, it is because they said that Argentina has nowhere to get the resources from. That is the same as saying that Argentina has nowhere to adjust," the president stressed.

"We are at a time where everything is under discussion. The Fund's dogma has already fallen to pieces," he insisted.

Speaking this week, Economy Minister Martín Guzmán predicted that talks with the IMF will be “long” and “complex.”

"We do not see an agreement arriving quickly due to the number of issues that must be negotiated," Guzmán said in a radio interview. He vowed that officials would go through “every detail on the basis of prudence."

 

– TIMES/BLOOOMBERG/NA

 

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