IMF aims for quick conclusion to Argentina talks, peso climbs
The International Monetary Fund said on Thursday it aimed to wrap up talks to "strengthen" a $50 billion backup financing deal with Argentina "as rapidly as possible," as the country`s peso and stocks climbed for a second straight day.
Late on Wednesday, Economy Minister Nicolas Dujovne said he had "enormous confidence" that Argentina would be able to reach agreement with the IMF on early disbursements from the $50 billion standby loan, which was approved in June before the peso suffered a fresh bout of sharp depreciation last week.
A new deal with the IMF is seen as key to shoring up investor confidence in Argentina`s assets, as the peso has weakened about 50 percent against the dollar this year, making it one of the worst-performing emerging market currencies.
"Progress is being made in those discussions, which are now continuing at the technical level, and again, on how to further strengthen the Argentine authorities` program, which is backed by the IMF," IMF spokesman Gerry Rice told a regular IMF media briefing.
"What Madame Lagarde has said, is that we will be working to conclude as rapidly as possible," he added, referring to IMF Managing Director Christine Lagarde.
Rice said the talks included debt sustainability as well as "the potential of other forms of financing."
The closely-watched talks continued for a third day on Thursday although Dujovne, who led his country`s delegates at the start of the discussions, had returned to Buenos Aires as scheduled and left his team to hammer out details with the IMF in hopes of putting a deal to its board for approval this month.
The peso was up more than 1 percent against the dollar in early afternoon trading on Thursday, and Argentina`s Merval stock index rose more than 3.4 percent, led by financial stocks.
The market "is waiting for the terms of an agreement with the IMF," said local consulting firm Portafolio Personal, noting a more optimistic mood.
Outside banking and finance circles, Argentina`s talks with the IMF have revived painful memories of the 2001-2002 economic crisis that plunged millions into poverty, which many in Argentina blamed on IMF austerity terms for a bailout.
On Thursday, thousands marched in downtown Buenos Aires to protest new belt-tightening measures announced by President Mauricio Macri on Monday to pave the way for a new IMF deal. The measures include eliminating government ministries, deep spending cuts and new taxes on exporters.
The center-right president warned his countrymen that poverty would increase as the economy was headed back into a recession, having just emerged from its last one in 2016. Inflation is expected to end the year at more than 40 percent.
Carrying signs that said "Macri=Hunger" and "Enough Cuts!" the protesters, many members of union and leftist organizations, demanded Macri abandon talks with the IMF.
"We absolutely reject the IMF and Macri`s government because in the long term or the short term, we are the ones living with these adjustment policies," said Milca Sosa, 28, the head of a housing cooperative in a Buenos Aires cooperative.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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