- Argentina is suffering with the increase in the dollar’s value and inflation, and the measure is an attempt by the government to control the economic instability of the country;
- Hernán Lacunza took over the Argentine Ministry of Finance after Nicolás Dujovne resigned.
With the intention of promoting stability in the midst of recent events, events that shook the political and economic situation of the country, Argentina announced yesterday, Wednesday, its plans to renegotiate its debt with the IMF. The press release was given by the current Argentine Minister of Finance, Hernán Lacunza, who informed in the public interview of the meetings that would take place with the Fund over the next few weeks.
It is the first step in a discussion that, according to Lacunza himself, will likely extend over time and conclude by the date of the country’s next presidential legislature. The primary objective of the renegotiation is to push back the deadlines of their debt with the financial institution–and not to draft a new proposal with different payment amounts and deadlines–which will constitute a moratorium.
“I think it’s neutral to positive,” said Ezequiel Zambaglione, head of strategy at Balanz Capital Valores in Buenos Aires, as reported by the news agency Bloomberg. “In the worst case scenario, nobody accepts the offer and you are in the same situation as yesterday. And if they reach an agreement and are successful in the swap, you’ll have less funding needs for the next years.”
Besides the intention of revising the deadlines of Argentina’s debt with the IMF; during the public interview, Lacunza also announced the government’s aim to also extend the maturity of the short-term debt for institutional investors, such as banks and insurance companies. Both are measures taken by the Argentine government as part of its strategy to try and contain the rising value of the dollar and inflation in the country, which has been suffering from currency instability.