Leaders from Brazil, Mexico, Colombia, Chile, Bolivia, and Paraguay have reached out to U.S. President Joe Biden, requesting support for Argentina’s plea to the International Monetary Fund (IMF) to modify the terms of its US$45 billion loan refinancing.
The objective is to prevent Argentina, under the leadership of Alberto Fernández, from defaulting on its loan and facing contractual penalties.
In a joint letter released by Itamaraty on Thursday, the presidents, primarily from center-left political backgrounds, emphasized that disregarding the changing circumstances and imposing inflexible demands on Argentina would unnecessarily push the country into a crisis.
They believe that a mutually agreeable solution can be reached, enabling Argentina to navigate its challenging economic situation.
The Argentine government has urged the IMF to revise the targets established in March 2022 for refinancing the debt acquired in 2018, amounting to US$45 billion.
Fernández contends that severe drought, the most severe in a century, has hampered grain exports, causing a loss of US$20 billion for the country.
Argentina argues that the decline in export revenues has depleted international reserves, limiting the Central Bank’s ability to intervene effectively in the foreign exchange market.
The devaluation of the Argentine peso in the past year has fueled inflation, which has exceeded 7% monthly in the last three months alone.
Presently, Argentina faces an annual inflation rate of 114% and an interest rate of 97%.
The leaders of neighboring nations believe that supporting Argentina’s efforts to find a consensual resolution is crucial to help the country overcome its economic challenges.
By engaging the IMF and exploring alternative refinancing conditions, they hope to avert a destabilizing crisis in Argentina.