Argentine Congress to Have Final Say Over IMF, New Foreign Debt Agreements

RIO DE JANEIRO, BRAZIL – Argentina’s Ministry of Economy said on Monday, November 9th, it would send a bill to Congress that would establish the legislature as the final approver of agreements with the International Monetary Fund (IMF) and the issuance of new foreign debt.

The South American country has recently emerged from a sovereign default situation after restructuring almost US$110 (R$585) billion in foreign currency bonds, and faces talks starting this month with the IMF over a deal to replace a partially non-utilized US$57 billion credit facility.

“We think it would be healthy for decisions to borrow in foreign currencies to have congressional approval,” Economy Minister Martín Guzmán said in a statement. “This has to do with turning debt sustainability into state policy.”

The bill would mean no IMF deal could go ahead without Congress’ support, nor could the government issue foreign debt without backing from lawmakers.

An IMF mission is expected to arrive in the country on Tuesday, November 10th, to launch formal talks to replace the 2018 agreement, which has already seen around US$44 billion disbursed.

“The intent is to replace the current program with a new one that is based on completely different principles, understanding that there is no restoration of macroeconomic stability without the recovery of economic growth,” Guzmán said.

Source: Reuters