The Argentine President Alberto Fernández announced that he reached an agreement with the International Monetary Fund (IMF) to refinance the debt for 44 thousand 500 million dollars contracted in 2018, which he described as “a noose around the neck, a sword of Damocles” that conditioned the future of the South American country.
“We had an unpayable debt that left us without a present or a future and now we have a reasonable agreement that will allow us to grow and comply”, the president said in a message broadcast on the national network.
Since 2020, Argentina has been in an arduous negotiation with the IMF to refinance the debt contracted in 2018 during the government of Mauricio Macri (2015-2019) in the midst of a currency crisis.
The initial amount granted had been for more than 55 billion dollars, the largest in the history of the organization. 44.5 billion dollars were transferred to the South American country.
This year some 19 billion dollars were due – half of the Central Bank’s reserves – and only in the first quarter it was necessary to cancel three thousand 900 million. The Government had warned that it was not in a position to face these amounts. “IMF staff and Argentine authorities have reached understandings on key policies as part of their ongoing discussions on an IMF-supported program,” the IMF said in a statement.
According to the Minister of Economy, Martín Guzmán, an Extended Fund Facility (EFF) program was agreed to refinance the maturities of the next two and a half years, practically the remainder of Fernández’s term.
The country, for its part, committed to meeting a primary fiscal deficit target of 2.5% of GDP in 2022; 1.9%; in 2023 and 0.9% in 2024. Lower monetary issue, price control policies, control of capital flight and increase international reserves (five billion dollars this year) are other central points of the agreement.
The announcement was made on the same day that the country must face the payment of 731 million dollars. The uncertainty about the progress of the negotiations and the certain possibility that the South American country would fall into a new default had taken the price of the dollar to a record price in the informal exchange market, while the country risk in the index skyrocketed. prepared by the consulting firm JP Morgan.