Argentina Formally Requests Debt Renegotiation with IMF

RIO DE JANEIRO, BRAZIL – Argentina is officially in talks with the International Monetary Fund (IMF) to negotiate a new debt relief program.

The letter was sent by the Argentine Minister of Economy, Martín Guzmán, and the president of the Central Bank, Miguel Pesce, to the managing director of IMF, Kristalina Georgieva, stating that there can be no stabilization “without economic reconstruction”.

The goal of the new credit and a payment restructuring would be to enable the repayment of US$44 billion (R$220 billion) that Argentina received from the IMF two years ago.

Georgieva, in turn, said she was positive about a meeting with Argentinean President Alberto Fernández and Martínez. They discussed the major challenges Argentina is facing.

Fernández commented: “we must put the accounts with the international organizations in order. We will do so with a common logic: that of not putting Argentina on hold and not causing more suffering to those who have suffered so much.”

The talks with the IMF are the next step towards the country’s long-term financial stabilization. Argentina had already agreed in late July with private creditors to reschedule US$65 billion of debt to foreign creditors.

Last Friday, the deadline for private creditors to revoke the agreement expired. This should enable the debt-rescheduling agreed at the beginning of August to be implemented.

However, the international credit rating agencies are doubtful as to whether Argentina will be able to repay the new debt.

In 2018, the IMF had granted Argentina the largest loan in the history of the fund: Despite the sum of over US$ 57 billion, of which the aforementioned US$44 billion was initially disbursed, the country failed to boost its economy during the years of President Mauricio Macri’s reign, and was unable to pay off its debts.