Argentine President Mauricio Macri said on Wednesday that he has asked the International Monetary Fund to accelerate disbursements from the $50 billion credit line granted to the country earlier in June to ease the nation’s financial crisis.
The request underscores the government’s need to reassure markets that it has enough money to fund itself through 2019 amid the second recession in two years, inflation near 30 percent and the world’s highest borrowing costs.
Argentina received the first $15 billion of the program in June and the government was expecting to get an additional $3 billion in September. Macri did not say how much he had requested from the Fund. IMF economists and technicians are in Argentina this week in meetings with government members to review portions of the agreement.
“We have agreed with the IMF to forward all the funds necessary to guarantee compliance with next year’s financial program,” Macri said in a televised address. “This decision aims to eliminate any uncertainty that was created before the worsening of the international outlook.”
The Argentine peso fell 0.5 percent to a record 31.5 per U.S. dollar on Wednesday after the announcement. The peso is down 40 percent this year against the dollar — the worst-performing currency in emerging markets. The currency has declined more than 12 percent in this month, hurt in part by an emerging market selloff and confusion about the central bank’s measures to unwind portions of its debt.
Argentine dollar bonds also fell. The 10-year bond fell 0.5 cents to 75.64 cents, pushing its yield up 10 basis points to 9.9 percent, near a record high.
The currency crisis has put Argentina on track for a recession this year. Treasury Minister Nicolas Dujovne said Monday the economy will contract 1 percent in 2018, in a sharp reversal from a 3 percent growth forecast earlier the year.
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