Argentina calls for early release of $50bn IMF support as crisis deepens
Argentina has requested the early release of a $50bn (£38.5bn) credit line from the International Monetary Fund (IMF) after the peso hit new lows amid a deepening financial crisis.
The value of the Argentine peso toppled yesterday, prompting the government to call on the IMF to speed up access to the funding in a bid to raise confidence in the economy.
The currency is at a low of 34.00 against the US dollar this morning and is more than 45.3 per cent down this year.
In a statement, IMF managing director Christine Lagarde said staff would "strengthen the fund-supported arrangement" and "re-examine the phasing of the financial programme".
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Lagarde added:
“In consideration of the more adverse international market conditions, which had not been fully anticipated in the original program with Argentina, the authorities will be working to revise the government’s economic plan with a focus on better insulating Argentina from the recent shifts in global financial markets, including through stronger monetary and fiscal policies and a deepening of efforts to support the most vulnerable in society."
Decline in the peso has resulted in a jump in inflation and increased interest rates of 45 per cent. The government has said that the recession will lead to an economic contraction of one per cent this year.
“Over the last week we have seen new expressions of lack of confidence in the markets, specifically over our financing capacity in 2019," Argentine president Mauricio Macri said yesterday, according to the BBC.
“We have agreed with the International Monetary Fund to advance all the necessary funds to guarantee compliance with the financial program next year. This decision aims to eliminate any uncertainty."
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