The Argentine economy faces a key week with the IMF's visit



Argentina faces a new key week for its economy with the arrival of an International Monetary Fund (IMF) mission to advance debt renegotiation after the ex-president and current vice president, Cristina Fernández de Kirchner (2007-2015), urges to the organism to carry out "a substantial removal".

The IMF delegation will arrive in the country on the same day that the Minister of Economy, Martin Guzman, will appear before the Chamber of Deputies to explain the general guidelines of the negotiation that takes place both with the Fund and with international creditors.

Fernández de Kirchner said on Saturday that the $ 56.3 billion loan, of which 44,000 million was disbursed, received by the government of conservative Mauricio Macri (2015-2019) "is not only the most important in the history of the Monetary Fund but which was granted even violating the IMF's own statute. "

"The rules must be respected by all," said the vice president during the presentation of her book "Sincerely" at the International Book Fair in Havana.

Just as "the debtor will respect the rules, at least (the International Monetary Fund) should establish a substantial take-off because he made a loan outside the history of the IMF, compromising 60 percent of the agency's loadable capacity and did violating obligations that the Fund itself has, "said the ex-president, who during her administration did not allow the multilateral agency to audit the Argentine accounts.

Until now, the Government had avoided talking about the conditions of debt restructuring and whether a delay would be added to the postponement of payment terms.

Fernández de Kirchner added pressure to the negotiations already initiated by Guzmán, who met last Tuesday for more than two hours with the IMF managing director, Kristalina Georgieva, in Rome, and the support that President Alberto Fernández received during his recent Tour in Europe, including those in Spain, Germany and France.

The president also added on Friday the support of the president of the United States, Donald Trump, who assured him that he will be able to count on him in the negotiations.

According to data from the Ministry of Finance, at the end of last December Argentina's gross debt amounted to 323,177 million dollars, of which about 194,000 million dollars correspond to debt in medium and long-term public bonds.

The Argentine Government aspires to conclude the process of renegotiating the external debt by the end of March, a period that is too ambitious for economic analysts, particularly after the failure of the province of Buenos Aires days ago in its attempt to postpone for three months the payment of a bond for 250 million dollars when not obtaining 75% of adhesion of the holders of the title.

To prevent the richest and most populous district of Argentina from entering "default" amid the renegotiation of the national government's debt, the Buenos Aires governor, Axel Kicillof, of the same political color as President Alberto Fernández, decided to pay with his own resources Due date.

Nor was the launching of a voluntary exchange of the AF20 bond, also known as "Dual Bonus" last week, a title issued in July 2018 and expiring next Thursday, with a maturity totaling 105,000 million pesos ( about 1,670 million dollars), since it only managed to change 10%.

Faced with this meager result, the Government will tender on Monday three letters of the Treasury to add resources that will allow it to finance a large part of the "Dual Bonus" due due on Thursday.

"Resolving the issue of debt is a necessary condition for us to grow," said the president, who since his assumption last December 10 aimed to restore the sustainability of Argentine debt.

Therefore, the next few days would be decisive since the Minister of Economy must explain the debt restructuring project, at a time when bondholders demand that Argentina present its economic plan to have a little more certainty for the future.

The South American country is in a recession since April 2018 that aggravated the social crisis, with more than a third of the population in poverty and an increase in unemployment above 10%.

The president was reluctant to reveal the guidelines of his economic policy during his recent visit to France.

"It is not true that we have no plan, it is true that we do not tell it. And we do not tell it because we are in full negotiation. It would be to discover the cards: we are playing poker and not with boys. We have to do it well, with intelligence, but the plan is to put the Argentine economy back into operation, "he said.

Some details will begin to be revealed with the arrival of the IMF mission, which will come to audit public accounts, growth prospects, official policies to control inflation, which in 2019 reached 53.8%, and if there will be a fiscal adjustment plan.

The IMF delegation will be chaired by the Argentine case manager, Luis Cubeddu, who already held that same position between 2002 and 2004.

"The mission will focus on cooperating with the Argentine authorities in terms of understanding the economic policy framework and being able to make our projections on the country, by better understanding the measures that are being taken to improve the situation of poverty and revive the economy" , said in January the regional auditor of the International Monetary Fund (IMF), Alejandro Werner.

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