IMF all but confirms delay for next US$5.4-billion loan tranche

The International Monetary Fund (IMF) “remains fully engaged” in trying to help Argentina, but a rapid solution is complicated by the uncertainty facing the country, a Fund spokesman said Thursday, as officials all but confirmed the next tranche of the troubled country’s US$57-billion loan would be delayed.

Reports in local outlets, including Infobae, also suggested additional payments from the World Bank and InterAmerican Development Bank would likely also be delayed until after the election.

However, officials from the Treasury refuted those claims on Thursday afternoon in a bid to shift the narrative, saying existing arrangements with those organisations remained on track.

The International Monetary Fund refused to say Thursday when it will disburse the last $5.4 billion of a massive loan to Argentina that was originally planned for mid-September.

“We will move in the discussions as fast as we can, and try to do the best we can for Argentina in every respect,” IMF spokesman Gerry Rice told reporters. “In light of the complex situation and the policy uncertainty it has been difficult to find a quick path forward.”

Argentina is awaiting release of a US$5.4-billion loan disbursement from the IMF, but on Wednesday acting IMF chief David Lipton told Bloomberg that the financial relationship with Buenos Aires “may have to wait awhile.”

However, Rice pushed back on reports that the IMF has put its relationship with Argentina on hold.

“That is incorrect,” he said in his regular biweekly press briefing. “I don’t have specific info on timing, but the discussions are ongoing.”

Reporters had asked him whether the organisation will wait for the winner of the October presidential elections to take office on December 10 before releasing the funds. Rice saidthereisnorealdelaybecause the loan programme doesn’t spell out a hard deadline.

According to reports, Alberto Fernández’s economic team are on the same page as the IMF, having previously asked the Fund to halt the disbursement of more cash until after the election.

MEETINGS

Newly-appointed IMF Managing Director Kristalina Georgieva, who officially takes up her post next Tuesday, met with Finance Minister Hernán Lacunza in Washington on Wednesday.

Lacunza’s team also met with other key IMF officials, and is expected to return to Washington for the institution’s annual meetings in mid-October, Rice said, saying the “discussions continue very actively.”

TheIMF’snewchief,whothe organisation’s board confirmed on Wednesday would succeed Christine Lagarde, said on Twitter afterwards that she looks forward to working with Argentine officials when she formally assumes her post.

The Treasury said in a statement Thursday that Georgieva had indicated that “she wanted the first meeting of her administration to be with Argentine officials.”

Acting IMF Managing Director David Lipton also met President Mauricio Macri on Tuesday in New York, after the president made a surprise appearance at the talks.

The government has received about US$44 billion so far of the record US$57 billion, three-year loan approved in June 2018 but soaring inflation and rising poverty stirred outrage at the government’s belttightening measures.

Lacunza, who has been in his post just over a month, also announced initiatives to postpone debt payments to institutional investors, relieving the pressure on international reserves so they can be used to stabilise the currency which spiralled lower in the wake of the election.

Lipton acknowledged that the government’s steps have helped calm the situation, but IMF officials declined to speculate on the timing for releasing additional funds.

Lagarde, speaking Wednesday, defended the IMF’s decision to give Argentina a record credit line last year, even after the programme fell short of stabilising the nation’s troubled economy.

“We did the best we could at the time when Argentine leaders came to us with a very difficult situation,” the former IMF managing director and soon-to-be European Central Bank chief said in an interview with Bloomberg Television in New York.

She also argued that the IMF is unfairly blamed when things go awry.

“This is the fate of the institution, to be the scapegoat when things go wrong,” said Lagarde.