Argentine President Alberto Fernández said this Friday (28) that he has reached an agreement on the country’s debt with the International Monetary Fund (IMF).
“We had a problem and now we have the solution with the deal,” he said in a statement posted on Twitter.
He added: “With this agreement, we can build a future. Compared to previous agreements that Argentina signed, this agreement does not include restrictions that delay development. It does not restrict, does not limit and does not condition the rights recovered in 2020.”
Furthermore, according to Fernández, the agreement with the IMF does not oblige the country to carry out a labor reform or to reach a zero deficit. “There will be no drop in real spending and there will be an increase in investments in public works”, he pointed out.
The Argentine president also highlighted that the agreement will be submitted to Congress for consideration and approval.
Argentina’s Economy Minister Martín Guzmán said on Friday that the deal, which will restructure debt repayments of about $44.5 billion, would involve a “gradual” reduction of the country’s fiscal deficit to 0. 9% of GDP by 2024.
The economy minister said the standby agreement, yet to be confirmed by the IMF and which will need congressional approval, will not impact the country’s growth and will see a gradual reduction in central bank funding to the Treasury.
Markets react with optimism
The Argentine stock market rose sharply in response to Fernández’s announcement.
The S&P Merval index – a benchmark for the Argentine stock market – jumped 3.6% at 11:28 am (GMT), pulled by shares of companies in the energy and financial sectors.
“The announcement gives the market a little breather, but we have to be cautious and see how the deal is implemented,” said one exchange trader.
The Argentine peso in the parallel foreign exchange market appreciated 2.53% in the first trades this Friday, quoted at 215/217 per dollar at 11 am, after hitting an all-time low of 223.50 per dollar for sale on Thursday. .
The informal market exchange rate had a differential of 107% compared to official quotations.
Argentina’s country risk dropped sharply by 70 basis points on Friday. The JPMorgan Bank index was at 1,834 units, after marking a historic peak of 1,969 points this week.
*With information from Reuters
Reference: CNN Brasil
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