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Why is it “unlikely” that an agreement between Argentina and the IMF is what Martín Guzmán and Cristina Kirchner want

Prior to the meeting between the Minister of Economy Martin Guzman and the managing director of the International Monetary Fund (IMF) Kristalina Georgieva, the head of the Palacio de Hacienda and the president of the Central Bank Michelangelo Pesce They met with the team of technicians of the multilateral organization.

There are those who consider that it is “unlikely” that an agreement for the repayment of the loan of US$45.000 millones sea on the terms they want Guzmán and the vice president Cristina Kirchner. Argentina does not want adjustment, it demands a reduction of surcharges that the country faces due to the debt with the multilateral and that the repayment term is 20 years.

These proposals collide with what was reported by the agency Bloomberg Regarding the fact that in an informal meeting held last month, the Fund rejected the possibility of cutting surcharges, it confirmed that the loan repayment term is ten years and that there should be a fiscal adjustment. In that sense come with good eyes to the Minister of Economy.

The IMF technicians also stated that Argentina has to have “a coherent plan” and they don’t want there to be a big gap from an official dollar to $ 100 and the parallel to $ 190.

The reaction of the Minister of Economy Martín Guzmán to the ratification of Kristalina Georgieva by the IMF

The Minister of Economy felt relief after the IMF ratified its managing director and broke the news to the president Alberto Fernandez on Monday night. The agency confirmed Georgieva in office, who was identified as having been responsible for manipulate a report from the World Bank (Doing Business) with the intention of favor China. Although the managing director continues in her position, she is left with a conditioned power, which complicates Argentina.

The reduction of the surcharge paid by Argentina is at the center of the discussion of the Fund Assembly

As reported by the agency Bloomberg, the board of the International Monetary Fund (IMF) discarded the request of the Alberto Fernández government to discuss a reduction in the surcharges that the country pays to the multilateral organization. According to the agency, in an informal meeting in September the IMF rejected Argentina’s request to consider a temporary reduction of the extra commissions that the organization charges to the countries that make use of credits above quota that corresponds to them as members.

Sources from the Argentine economic team questioned what was reported by the news agency because “in that same note it says that the IMF stated that there are no definitions and the Ministry of Economy the same”They said.

Meanwhile, on Monday afternoon, the G24 met in Washington and urged the IMF to review its surcharge policy that applies to loans.

In line with the claim of the Argentine government, that group -among which are Argentina, Mexico and Brazil- again asked the IMF for a review of the surcharges applied to loans, while asking deepen financing measures for developing countries to shore up the exit from the Covid-19 crisis.

“We ask the IMF to consider reviewing the access limits and the surcharge policy. We urge the IMF to correct the regressive and pro-cyclical nature of the surcharge policy and to suspend, or at least to substantially reduce existing surcharges in order to support responses to the pandemic, “said the group of 24.

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