IMF and Argentina Find Common Ground Amid VP’s Bombshell Remarks
(Bloomberg) -- Argentina and the International Monetary Fund coordinated messaging Thursday on the principles that could underpin the country’s program with the lender, a day after the vice president put the deal in doubt.
In a statement, IMF negotiators Luis Cubeddu and Julie Kozack said they found “common understanding” with Economy Minister Martin Guzman on areas such as inflation, exports and developing domestic capital markets. Guzman reiterated these points in a series of tweets too, after meeting with IMF officials Wednesday in Washington.
The unified communication came after Vice President Cristina Fernandez de Kirchner stated Argentina can’t repay the IMF the $45 billion the nation owes it from a previous program. Neither Guzman’s ministry nor the IMF has addressed Fernandez de Kirchner’s comment.
The IMF’s executive board also conveyed broad support Wednesday to increase its special drawing rights for members by $650 billion. That translates into an extra $4.4 billion for Argentina, according to the government.
Still, it’s increasingly unlikely that Argentina could reach an agreement with the IMF by May as initially stated. Talks have made no visible progress since Guzman completed a restructuring with private creditors last August. The IMF hasn’t conducted an extensive look at the economy, known as an Article IV review. President Alberto Fernandez says he doesn’t want to rush negotiations either.
ARGENTINA REACT: IMF Shows It Won’t Budge, Deal Remains Far Off
On the issues, both sides agreed that inflation in Argentina is a multi-faceted problem that requires consistent economic policies and coordination to anchor expectations. Increasing value-added exports is another priority both sides agreed upon. The IMF also noted the importance of private investment to sustain growth in Argentina.
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