Argentina Won’t Ask IMF for Net New Funds in Upcoming Talks

Argentina, which is starting negotiations with the International Monetary Fund over a new program, won’t be seeking fresh funding, the representative of the country to the Washington organization said.

The Argentine government will only request enough money to meet its obligations with the multilateral lender, Sergio Chodos, the IMF executive director for the Southern Cone, said in an interview Thursday. The Latin American nation plans to continue to make interest payments during the talks, he added.

“We’re basically talking about a refinancing,” Chodos said at the Economy Ministry in downtown Buenos Aires. “At this point, the intention is not to seek net new funds.”

The administration of President Alberto Fernandez on Wednesday formally requested to start talks over a new program that will address $44 billion in payments owed to the Fund as part of a previous arrangement that failed to lift the crisis-prone economy. That would also make it the country’s 22nd program with the institution since 1958.

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In 2018, Fernandez’ predecessor Mauricio Macri received a record $57 billion IMF bailout, of which $44 billion was disbursed. Funding stopped once the program ran into trouble after a primary election a year ago, leading to speculation that the new government would seek now the additional $13 billion from the original program in fresh funding.

Chodos said he expects a new program to be ready in the first quarter of 2021. While the format will depend on the talks, it will likely be either a stand-by agreement, like the plan agreed with Macri, or an extended fund facility, typically a longer program.

“The format is the end point of the discussions,” he said.

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