The International Monetary Fund (IMF) says its staff are “working very hard” with Argentina to redraw the terms of the inflation-wracked country’s multi-billion-dollar debt deal and cope with the “very complex” economic situation it faces.
Speaking during a livestream press conference from the multilateral lender’s headquarters in Washington, IMF Spokesperson Julie Kozack confirmed that talks were underway regarding the fifth quarterly review of Argentina’s US$44.5-billion extended fund facility agreement.
“The focus of the discussions of the fifth review has been on alternatives to strengthen the authorities' programme, while also recognising the impact of the drought on the economy,” Kozack told reporters.
“This includes discussions on policies to safeguard stability, enhance fiscal sustainability, and strengthen reserves in the country. Each of these are essential to reduce inflation and ultimately protect the most vulnerable members of society who are often those most affected in these challenging economic times.”
Consumer prices in Argentina are soaring, with inflation over the last 12 months exceeding 108 percent.
“The teams are continuing to work constructively, discussions are frequent, and they are aimed at advancing the programme. And we will communicate more when we have greater details,” added Kozack, avoiding details.
A number of Argentine officials are due to travel to Washington next week in an attempt to finalise negotiations, which have mostly been carried out remotely. Economy Minister Sergio Massa’s presence has not been confirmed, though the Frente Renovador leader is expected to travel to the United States after June 20.
President Alberto Fernández’s government wants to bring forward scheduled disbursements in the deal in order to boost Central Bank reserves, which are being eroded by interventions in the currency market and the nation’s worst-ever drought on record.
Government sources say the talks are currently focused on how much cash the IMF could advance and what percentage of it should be used to cancel debt and defend the peso, Argentina’s national currency.
Massa’s team is seeking around US$20 billion in advance, according to reports. The country is due to make a debt payment of around US$2.6 billion between June 21 and 22m with the government seeking to close a deal