IMF Supports Substantial Argentina Debt Relief


BUENOS AIRES (AP) – The International Monetary Fund (FM) strongly supported Argentina’s debt restructuring process by stating on Friday that private creditors must accept “substantial relief” so that it can be sustainable and avoid cessation of payments.

“Given the ability to service debt and the current weight of the country’s debt, substantial relief from private creditors will be necessary to restore sustainability with high probability of debt,” the agency said in a statement.

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Argentina has set itself the goal of restructuring with foreign credi tors foreign currency securities for about $ 70 billion. At the same time, it is renegotiating the return of the $ 44 billion that the IMF gave it between 2018 and 2019.

Before the coronavirus, Argentina faced the challenge already in a context of economic recession, high inflation and poverty that affects more than 35% of the population.

The IMF, according to what a technical mission that visited Buenos Aires in February was able to establish, considered that the South American country should reduce gross financing needs to an average of 5% of GDP and not more than 6% of GDP “for any year in the medium and long term ”.

This would imply, taken to numbers, a relief of the debt in foreign currency of “between 55,000 and 85,000 million dollars during the next decade”.

The organism’s considerations contemplate a world economic panorama that is not very encouraging due to the coronavirus pandemic.

“It is important to emphasize that our priority is, and will continue to be, to support Argentina’s recovery and the protection of the most vulnerable groups,” said the IMF.

Argentina has not yet formalized a proposal to remove private creditors, but also on Friday its Economy Minister Martín Guzmán warned that “Argentina’s debt today is not sustainable, it is not bankable and it is not affordable.”

“We do not want to commit to starting a negotiation that we cannot sustain over time,” he said.

Due to the impossibility of traveling abroad in the current context, Guzmán announced that negotiations with creditors will be by videoconference.

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