Argentine President Macri, speaking on television, has admitted that his collapsing country has asked The IMF to accelerate their bailout payments from the $50 billion line as, presumably, they are blowing through it faster than expected in a failed effort to stabilize the peso.
As Bloomberg notes, Argentina received the first $15 billion of the program in June. It was expected to receive $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 televised address.
“This decision aims to eliminate any uncertainty that was created before the worsening of the international outlook.”
Just yesterday, BCRA sold over $200mm and failed to keep the peso off record lows…
It’s not working…
As The FT reports, the recent turmoil in emerging markets has since muddied the outlook and called into question how Argentina will meet its $82bn financing needs for this year and next, while navigating a looming recession and rising consumer prices ahead of a presidential election in 2019.
While most investors believe that policy continuity is crucial if the economy is to normalise, the turbulence roiling emerging markets adds additional hurdles to an already-treacherous obstacle course, according to John Baur, a portfolio manager at Eaton Vance.
“With the external environment and the uncertainty about where the [Argentine] peso is going to end up, it’s just too hard to say if they can meet their IMF targets,” he said.
And judging by Macri’s comments today, it’s worse than expected.
Read on ZH