Imf Agreement Argentina

BUENOS AIRES, Aug 27 (Reuters) – Argentina is seeking a new deal with the International Monetary Fund only to repay about $44 billion received as part of an ill-fated confirmation agreement in 2018, the country`s representative to the fund said on Thursday. The restructuring of the IMF agreement will have a significant impact on Argentina`s economic forecasts and will lead to broader renegotiations with other creditors. „The crisis affecting our country today has been compounded by a quick agreement with the IMF in 2018, which was not sustainable,“ Argentine Economy Minister Martin Guzman and Central Bank President Miguel Angel Pesce wrote in a letter to IMF Chief Kristalina Georgieva on Wednesday. (Reporting by Hugh Bronstein; Cup: Jonathan Oatis) IMF Managing Director Christine Lagarde issued the following statement on the staff-level agreement: „The IMF cannot have a country with which it signed an agreement only two years ago and it is insolvent,“ he said. The government, which on Tuesday sealed an initial $65 billion debt deal with its private creditors, will attempt to begin formal negotiations with the Fund after September 4, when the deal will be settled with bondholders. The government is discussing with undecided bondholders aid to a debt rescheduling agreement with large groups of creditors. The government had announced its intention to complete the debt restructuring before it wanted to transform its agreement with the IMF. If Argentina is able to confirm the IMF`s support, this is an important precedent for the rest of the talks, Pezzarini said. „I don`t think a bondholder will accept a restructuring if you don`t have an agreement with the fund yet,“ she said.

Argentina has denounced the standby agreement with the Fund and will strive to reach a new agreement „very clear,“ Economy Minister Martin Guzman said on Tuesday after the creditors` agreement was announced. Staff at the International Monetary Fund and the Argentine authorities have agreed on a series of strengthened economic policies that will support the 36-month permanent agreement (SBA) adopted on 20 June 2018. Subject to imf Board agreement, IMF funding will be advanced through the revised arrangement, which will increase available resources by $19 billion by the end of 2019 and bring the total amount available under the program to $57.1 billion by 2021. The resources available under the programme would no longer be treated as a precautionary measure and the authorities intend to use IMF funding for budget support. Two years ago, Argentina`s previous government found itself in a situation of money shortage after President Mauricio Macri`s austerity, which included cuts in energy subsidies, pushed up electricity bills paid by businesses. Suppliers have increased consumer prices to cover their rising energy costs and to fuel inflation. The deferral of repayment of bulky IMF loans is the only destination in Buenos Aires. And on the IMF side, it will not force Argentina to privatize valuable assets in order to secure a good restructuring agreement. It will be a matter of finding a reciprocal compromise to pay off their debts. The challenges will be to identify the formula that makes repayment achievable in a struggling economy. The two sides are further apart ideologically than ever, with heterodox management of market intervention and monetization of the deficit, says Siobhan Morden, director of Latin American fixed-rate securities at Amherst Pierpont Securities in New York.