Argentina's Fernandez ends Europe tour with positive IMF signals, bonds rise
BUENOS AIRES (Reuters) -Argentine President Alberto Fernández said on Friday he wanted to reach a deal with the International Monetary Fund as quickly as possible as he wrapped up a positive European tour that has helped buoy the South American country’s depressed bond prices.
In a meeting with IMF head Kristalina Georgieva, Fernandez did warn that any new deal must not hurt Argentina’s people, who have grappled with recession since 2018 and poverty levels that climbed to 42% at the end of last year.
Fernandez, who met with Georgieva in Rome, is finishing a European tour during which he has been seeking support for his country in talks over a crucial new IMF deal and to delay debt repayments with the Paris Club group of lenders.
An IMF agreement, which officials initially had hoped could be struck early in the year, has been hit by delays with expectations now that a deal will be reached only after Argentina’s mid-term elections toward the end of the year.
“The aim is to find an agreement as quickly as possible, but we cannot think of an agreement that requires greater efforts from the Argentine people,” Fernández said after the meeting.
“It was a constructive meeting in which I insisted on my proposals that have to do with reducing surcharges, extending deadlines and understanding that the world is experiencing a unique moment that … must be taken into account.”
Argentina’s over-the-counter bond prices rose an average 2% on Friday, traders said, the best daily performance since a major private debt restructuring in August and September of last year. Bonds have since sunk back in to distressed territory.
Argentina is now looking to renegotiate some $45 billion in payments to the IMF after a record 2018 deal failed to drag the grains-producing South American nation out of an economic crisis that has deepened since the coronavirus pandemic struck.
Georgieva in a statement said the two leaders had held a “very positive meeting” and she had taken note of Fernández’s request for a reform of the IMF’s surcharges policy, adding she would discuss the matter with the Fund’s members.
Argentina also has a payment of $2.4 billion to the Paris Club of international lenders falling due this month.
Argentina has formally asked for an extension on the Paris Club payment and news agency Bloomberg reported on Friday, citing sources, that the group was willing to delay the payment under certain conditions.
The Paris Club declined to comment.
Stuck in recession since 2018, Argentina is facing stubbornly high inflation that could reach close to 50% this year, while investors, firms and individuals faces tough capital controls put in place to protect dwindling foreign reserves.
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