MEXICO CITY, April 15 (Reuters) – Argentina is thinking about how to persuade the International Monetary Fund to additional ease the financial targets embedded in the country’s $44 billion IMF loan system, a supply stated, as a extreme drought hits exports and threatens to push the economy into recession.
“All options are on the table. Perform will be accomplished on the system,” stated a supply familiar with the IMF system and discussions amongst Argentina and the IMF. The supply did not want to be identified due to the sensitive nature of the talks and declined to give additional particulars.
The IMF currently reduce the level of foreign currency reserves the nation desires at the finish of this year by $1.eight billion. The IMF cited the drought’s influence on soybean and corn, Argentina’s major export merchandise, and some analysts anticipate far more easing will be necessary.
IMF Deputy Managing Director Gita Gopinath stated on Saturday she held a “great meeting” with Argentina’s Economy Minister Sergio Massa to talk about the system.
“We talked about the influence of the worst drought in Argentine history and we committed to continue functioning closely with each other to strengthen the system beneath this tough situation,” Gopinath stated on Twitter.
Some analysts say that the financial targets baked into the system appear overly optimistic, specially in light of Argentina’s deteriorating macroeconomic outlook.
The IMF projects annual inflation for 2023 at 60% compared to analysts’ forecasts of far more than one hundred%.
In March, retail costs elevated by 7.7%, above analyst expectations, as Argentina’s annual inflation price soared to 104.three%.
Reporting by Walter Bianchi Editing by Drazen Jorgic and Cynthia Osterman
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