Facundo Iglesia 
The Argentine government sent a letter to United States President Joe Biden today, asking him to support Argentina in its negotiations with the International Monetary Fund (IMF).
The letter was co-signed by six Latin American presidents: Lula Da Silva (Brazil), Luis Arce (Bolivia), Gabriel Boric (Chile), Gustavo Petro (Colombia), Andrés Manuel López Obrador (Mexico), and Mario Abdo (Paraguay).
In March 2022, Argentina signed an agreement renegotiating the US$ 44 billion debt former President Mauricio Macri acquired in 2018, which includes an economic program with certain targets that Argentina must comply with to receive disbursements every three months, which are used to pay for the previous debt with the IMF.
“The inflexibility of the IMF in reviewing the terms of the agreement in the context of the drought risks turning a liquidity problem into a solvency one,” the letter said.
The Economy Ministry has been negotiating changes to the program’s goals over the past few months. Today’s letter asks for the IMF for a revision that allows the country to “bypass the hardships of this atypical year” with extra capital working “as a bridge until the time certain ongoing projects —particularly those related to energy and mining— can mature and provide a significant impact in the country’s payment balance.”
Some of the revisions Argentina is demanding include lowering the international reserve accumulation target and moving forward this year’s disbursements with the possibility of using part of them to intervene in the secondary bond market to suffocate currency runs.
The letter urged Biden to find a “consensual solution that allows Argentina to get through its current situation.” The United States is the IMF’s largest financial contributor and has the highest voting power of the participating countries at around 17%. Since 85% of votes are required for any motion to pass, the country has the ability to veto any major proposals.
“It is neither viable nor desirable that demands which disregard the changing circumstances may push Argentina into an unnecessary crisis that interrupts its ongoing recovery,” the letter said.
“The Americas’ shared and common principles regarding democracy, human rights, and social inclusion must guide us towards finding a swift and effective solution for Argentina. We rely on your empathy and your commitment.”
Argentina is currently facing a major international reserve scarcity crisis, as the government net reserves are calculated to be at negative U$1.5 billion. Nevertheless, sources in the Economy Ministry told the Herald that the government is going forward with payments to the IMF for US$1.9 billion, as per the renegotiated maturities calendar. The Ministry is setting the stage for the IMF’s complex payment process, which could be finished by Monday.
“It is a negotiation, and some days are better than others,” sources in the Ministry told the Herald.
Economy Minister Sergio Massa was allegedly expecting to travel to Washington DC to close the deal this week but sources could not confirm to the Herald whether the trip will happen.
In a tweet, President Alberto Fernández thanked his counterparts for today’s letter.
“It’s another show of the strength we have as a region if we work united,” Fernández said.
