The change of strategy will arrive in the coming weeks, the exact date is still unknown. Last week the IMF asked the country to adopt an “adequate monetary policy”, including interest rates that exceed inflation.
Argentina will have to renegotiate a new program with the Washington-based body to reschedule payments of more than $ 40 billion that it owes from a previous 2018 agreement. As part of the negotiations, Argentina requested that the IMF reimburse the country around US $ 3.8 billion that the government is using to pay off some of the loan maturities this year.
That includes a $ 1.8 billion payment due on December 22 that Argentina will pay using so-called special drawing rights, or SDRs.
An IMF spokesperson in its statement published on December 10 said that no relaxation of the strict capital controls currently in place in Argentina, nor an abrupt devaluation of the peso, is considered as part of a future IMF program.
The aforementioned statement was issued at the end of the meetings in Washington between an IMF team headed by Julie Kozack, deputy director of the Western Hemisphere Department, and Luis Cubeddu, head of mission for Argentina, and a technical delegation from the Ministry of Economy and the BCRA.
The statement had indicated that between both parties “There was a general understanding of the need to gradually and sustainably improve public finances, while giving rise to much-needed investments in infrastructure, technology and targeted social spending.”
It was precisely in that statement that the need to modify the rate policy had been specified. “Addressing the persistent and high inflation requires a multiple approach that implies a reduction in the monetary financing of the fiscal deficit, an adequate monetary policy with positive real interest rates and a coordination of prices and wages”, affirmed the Fund.
Source From: Ambito
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