LatinNews Daily - 03 July 2023

Argentina/Region: On 22 June Argentina’s government led by President Alberto Fernández sent a letter to US President Joe Biden, signed by the presidents of six other Latin American nations, asking for US support in Argentina’s negotiations with the International Monetary Fund (IMF). Brazil’s President Luiz Inácio da Silva, Bolivia’s President Luis Arce, Chile’s President Gabriel Boric, Colombia’s President Gustavo Petro, Mexico’s President Andrés Manuel López Obrador and Paraguay’s President Mario Abdo Benítez signed the letter, which called on the US government to support Argentina as it attempts to renegotiate the terms of its debt programme with the IMF with which it has a US$44bn extended fund facility (EFF) arrangement agreed in March 2022. The letter stated that renegotiations of the terms of the EFF were now needed due to the economic impact of the coronavirus (Covid-19) pandemic, the ongoing war in Ukraine and a recent devasting drought in Argentina which has led to a loss of more than 20% in foreign currency from exports. “Extraordinary circumstances merit an extraordinary response, as extraordinary as the over-indebtedness provoked by the IMF loan which is one of the main causes of the current situation”, reads the letter. The letter also notes Argentina’s commitment to honouring the terms of the deal, stating it had complied with targets and consolidated a process of growth, job creation and fiscal ordering. However, the letter warns that “the inflexibility of the IMF to revise the parameters of the agreement in the context of the drought runs the risk of turning a liquidity problem into one of insolvency”.

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