Argentina - Government Urges IMF To Lend $30bn To Fend Off Bankruptcy

Though no one dares to speak openly of another possible bankruptcy at this moment, the fact that Argentine is once again calling upon its historic foe, the International Monetary Fund, to lend it a sum of $30bn, was enough for international markets to react swiftly.

Although the Argentinean peso stabilized and the stock market edged up in the short term, the long-term investment might be hard to come by until this latest mess is solved.

<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">Argentina Breaks Fast<br><br>June &#39;17: Sells century bond<br>May &#39;18: Asks for IMF credit line <a href="https://t.co/PKPblrw8Ns">pic.twitter.com/PKPblrw8Ns</a></p>&mdash; Jonathan Ferro (@FerroTV) <a href="https://twitter.com/FerroTV/status/993888189994676224?ref_src=twsrc%5Etfw">May 8, 2018</a></blockquote>

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The government of President Mauricio Macri claimed that IMF aid would "strengthen growth" and help avoid crises of the past (Argentina famously defaulted on its international debt in 2002. It severed ties with the IMF for the past 12 years).

In an address to the nation, President Macri declared: "Just a few minutes ago I spoke with (IMF) director Christine Lagarde, and she confirmed we would start working on an agreement."

Related coverage: https://thegoldwater.com/news/25307-Argentina-Economic-Bloodshed-As-Interest-Rates-Hit-40-Inflation-At-25

"This will allow us to strengthen our program of growth and development, giving us greater support to face this new global scenario and avoid crises like the ones we have had in our history."

<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">Argentina, facing a steady depreciation in the peso, has entered talks to get a credit line from the IMF <a href="https://t.co/IIC8or92KX">https://t.co/IIC8or92KX</a></p>&mdash; The Wall Street Journal (@WSJ) <a href="https://twitter.com/WSJ/status/993911289067048960?ref_src=twsrc%5Etfw">May 8, 2018</a></blockquote>

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As we reported earlier this week, measures taken by the Argentinean national bank had heightened interest rates to 40% after year on year inflation hit 25% (now just behind Venezuela as the highest in Latin America).

The IMF’s director, Mr. Christina Lagarde confirmed Argentina’s demand, stating: "Discussions have been initiated on how we can work together to strengthen the Argentine economy and these will be pursued in short order."

Source:

https://www.ft.com/content/1301ea7a-52db-11e8-b24e-cad6aa67e23e