Additional IMF funding to Argentina ‘close to reality’

By Scott Squires and Eliana Raszewski

BUENOS AIRES (Reuters) – Argentine President Mauricio Macri said on Monday that the country was close to a deal with the International Monetary Fund to bolster a $50 billion credit line, while a government source said $3 to $5 billion in additional credit could be announced this week.

Macri said in an interview with Bloomberg TV in New York that Argentina would receive more support from the IMF but he declined to provide further details as talks were still in progress.

The government source, who asked not to be identified because the negotiations were ongoing, said that a report on the website of La Nacion newspaper that Argentina had secured an additional $3 to $5 billion in funding was “close to reality.”

Those funds would be on top of the $50 billion standby financing deal struck in June, after a bad drought sapped Argentina’s grain export sector and a run on the peso currency stoked fears the country would be unable to service its international debts in 2019.

The peso has lost around 50 percent of its value against the dollar this year. Fueled by the devaluation, inflation is forecast to end the year at more than 40 percent, pushing up poverty levels in Latin America’s third-largest economy.

“The most important part of the agreement is that we have a clear monetary policy that will show where we are going,” Macri said. He added that there was “zero chance” Argentina would default on its debts next year.

Macri, who said he was “ready to run” for a second term in next year’s election, forecast that Argentina would have to endure four to five more months of recession before an export-driven recovery would kick in. Given favorable weather forecasts, Macri said that grains exports next year would “rocket to new levels of production.”

The peso slipped around 0.4 percent on Monday to roughly 37.3 to the dollar, traders said.

Thousands of people thronged the streets of Buenos Aires on Monday protesting Macri’s policies, a day before a nationwide strike called by unions, who have threatened to shut down all public transit in the city.

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