Argentina seeks faster IMF credit line payments
Argentina's President Mauricio Macri has asked the IMF to speed up payments from a US$50bn standby credit line it secured from the multilateral in June.
The call comes amid continuing pressure on the peso and concerns over the country's ability to fund itself in 2019.
Argentina's economy is sputtering, with a drought and high interest rates and inflation putting the dampers on economic activity. The country is forecast to slide into recession this year but gather strength in 2019.
The IMF disbursed the first tranche, of US$15bn, in June.
"We have agreed with the IMF to forward all funds necessary to guarantee compliance with next year's financial program," Macri said in a video statement posted on social media. "This decision is aimed at removing any uncertainty generated before the worsening of the international context.
"Guaranteeing financing for 2019 will permit us to strengthen confidence and return to the path of growth as soon as possible."
Macri said the government would match the support with the "necessary fiscal efforts." Authorities, as part of an economic program, have committed to speed up the pace of belt-tightening and reduce the primary fiscal deficit to zero by 2020 from 3.8% of GDP in 2017.
Interest rates stand at 45% - the highest level since 2016 - and annual inflation is running at around 31%.
In related news, Moody's has commented on the fallout from the hikes in interest rates seen this year as part of efforts to bolster the peso.
The rating agency said in a release: "The credit implications of the rapid rise in interest rates will manifest in tightening borrowing conditions for individuals and companies. Therefore, the record-high benchmark rate will continue to hurt the economy, which began shrinking in May after a sharp devaluation and interest rate hike reduced investment and consumer spending, eroding business prospects for banks and other companies."
Moody's expects GDP to shrink 1% this year and inflation to reach 32% by the end of the year and decelerate to 22% in 2019. Market observers, prior to the peso turbulence - which started around the end of April - had forecast growth of around 3% for this year.
The peso was trading at above 31 to the US dollar on Wednesday. It was trading at around 18 in early January.
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