IMF to launch talks on new Argentina loan in November

WASHINGTON: The IMF said Monday it will start talks with the government of crisis-ravaged Argentina on a new rescue package in mid-November.

A team from the Washington-based crisis lender met with officials in Buenos Aires in recent days to discuss the country’s challenges amid the coronavirus pandemic, including debt owed to the fund, and to “exchange views on how best to address them,” the IMF said in a statement.

“IMF staff will continue to engage closely with the authorities. Staff plans to return to Buenos Aires in mid-November to initiate discussions on a new IMF-supported program,” the statement said.

Even prior to the pandemic, the South American nation was facing a severe economic crisis despite massive IMF lending in recent years, and the fund said the Covid-19 crisis exacerbated already high unemployment and poverty rates.

Buenos Aires are hoping to renegotiate repayments on a $44 billion loan from the IMF in 2018.

It was originally meant to be $57 billion, but President Alberto Fernandez halted disbursements when he took office in December 2019. The first repayments are due in September 2021.

“Argentina is facing complex economic and social difficulties, in the context of an unprecedented health crisis,” the IMF said in a statement.

“These are exceptionally difficult challenges with no easy solutions. A comprehensive set of policies could underpin a restoration of confidence, but will need to be very carefully calibrated to promote the recovery and secure macroeconomic stability.”

The fund staff said they “gained a deeper understanding of the authorities’ policy plans to stabilize the economy and put it on a more sustainable and inclusive growth path.”

In August, Argentina managed to restructure a $66 billion foreign bond debt that was worth 54.8 cents on the dollar.

The crisis-wracked South American country has been in recession since 2018, and its inflation is over 40 percent.