[ad_1]
Argentina has reached an agreement to prevent another harmful default by delaying most of a $ 2.4 billion payment due to a group of rich countries in late July, the minister said on Tuesday. Economy, Martín Guzmán.
Argentina now has until the end of March to reach an agreement with the the so-called Paris Club of 22 countries, which includes the USA, Germany, Japan and France.
Guzmán said Argentina would pay only $ 430 million in two installments earlier, the first before July 31, when the 60-day grace period ends for the original $ 2.4 billion payment on May 30. The deal would effectively save the country $ 2 billion over the next eight months, Guzmán said.
The agreement will provide some respite to the difficult Argentine economy, with foreign exchange reserves very depleted despite receiving a boost in commodity prices soaring in recent months.
“Resolving the issue of our unsustainable debt is a key pillar of the process of restoring stability to the economy,” Guzmán said at a news conference in Buenos Aires. He said it would also help alleviate annual inflation, which stands at almost 49%.
The agreement with the Paris Club comes like this negotiations they have stagnated due to the repayment of the $ 45 billion that the IMF has lent to Argentina since the 2018 currency crisis during the previous government of Mauricio Macri.
Local analysts say talks with the IMF have stalled due to political considerations, and that the midterm elections are approaching in November, when the government will not want to be hampered by harsh budget cuts agreed with the multilateral lender. .
Although Argentina was initially expected to reach an agreement with the IMF last year – shortly after a successful $ 65 billion restructuring due to private creditors – the absence of an agreement with the commitment to reduce the country’s abundant fiscal deficit had complicated talks with the Paris Club.
“Paying this amount would have been a hard blow to international reserves and would have generated more instability for the exchange rate and the macroeconomy in general,” Guzmán said, adding that a default would have destabilized the economy and caused greater uncertainty.
Guzmán clarified that the government would continue in “constructive” talks with the IMF and that the March deadline with the Paris Club “has nothing to do with the goal of an agreement with the IMF. Our goal is to get a good business, the sooner the better, but the priority is to be good ”.
The 38-year-old minister added that another key element of the agreement with the Paris Club was that Argentina would treat its creditors equally, to allay concerns in Japan that Argentina was paying its debts with China, but not with the Paris Club.
[ad_2]
Source link
