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Bank of America predicts an agreement between Argentina and the IMF by the end of the year

New York, Oct 20 (EFE) .- Bank of America expects the International Monetary Fund (IMF) to reach a general agreement with the Government of Argentina on the debt restructuring between December of this year and January 2022, according to a financial company report.

Specifically, the Bank of America document points out that Buenos Aires is “sending signals that the agreement with the IMF is a priority”, but at the same time it indicates that the elections scheduled in Argentina for next November “could result in more political instability. “

“Markets are concerned that this could delay negotiations with the IMF or lead to a watered-down program that does not solve fundamental problems,” explains the text, which also notes that the details of the agreement could be closed by March 2022.

Bank of America also points out that it is urgent to close the restructuring agreement of 44,000 million dollars of Argentine debt due to “the enormous maturities of IMF debt and the negative consequences on the exchange rate and on inflation due to possible delays.”

The report is published after the visit of Argentina’s Minister of Economy, Martín Guzmán, and the president of the country’s Central Bank, Miguel Ángel Pesce, to Washington, where the IMF is based.

If the agreement is not reached, the document foresees “strong consequences on currency flows, multilateral financing, investment, and could have an impact on a currency market that is already under pressure.”

Bank of America also advises that the Argentine government adjust the currency and fiscal policy “immediately after the elections to begin accumulating foreign exchange reserves, which are at critically low levels.”

The document also calculates that the primary deficit in 2022 will be 2.9% of GDP, below the government budget, which projects that this figure will be 3.3%.

This is because, according to Bank of America, Argentina is underestimating the growth of its economy and inflation, as well as income, which it believes could surprise to the upside.

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