The Argentine government and the International Monetary Fund (IMF) announced on Sunday that they had reached an agreement in principle on the payment terms of the Argentine debt of 44,000 million dollars.
They agreed on “the main objectives and parameters that will serve as the basis for a ‘service level agreement’ whose completion, scheduled for the next few days, will then allow the revision of the Argentine program,” they added.
Argentina is in chronic bad currency
A team from the government of Alberto Fernández traveled to Washington on July 16 to try to facilitate the objectives of a refinancing agreement for the country’s enormous debt with the IMF in 2022, as well as to ensure the planned disbursements.
Argentina, where presidential and legislative elections will be held in October, did not meet the targets for accumulating international reserves and reducing the fiscal deficit established for the first and second quarters of this year.
With monetary reserves in free fall, Argentina had to pay, on June 30, an installment of $2.7 billion in Special Drawing Rights (SDR, the IMF’s unit of account based on a basket of currencies, note) and a part in yuan (the Chinese currency). He still has to repay the IMF on July 31 a quota of 2.5 billion dollars.
But Argentina has chronic problems with currencies, particularly the dollar, and is seeking an agreement to make this payment plan more flexible. The country announced in April that it would now pay for its Chinese imports in yuan instead of US dollars, like Brazil, amid a shortage of greenbacks.
Struggling with inflation above 100% year-on-year, Argentina is also in a general election year, which often adds to economic and financial instability.
Source: BFM TV
