Home Argentina BofA Says For Argentina It’s ‘Time for Action’, Sees IMF Staff-Level Agreement by January

BofA Says For Argentina It’s ‘Time for Action’, Sees IMF Staff-Level Agreement by January

BofA Says For Argentina It’s ‘Time for Action’, Sees IMF Staff-Level Agreement by January
A man walks past Argentina's Central Bank (Photo by JUAN MABROMATA/AFP via Getty Images). Courtesy of Getty Images

NEW YORK — Bank of America is keeping it’s original call that Argentina will be able to reach a new financing program with the International Monetary Fund  in the months ahead, averting a complicated scenario for the embattled South American nation.

In a new research report to investors dated December 9, Bank of America says that the administration of President Alberto Fernández “seems to be accelerating negotiations with the IMF, amid FX pressure,” with a delegation negotiating with the multilateral lender in Washington D.C. since last Sunday.

“But markets wait for concrete measures, given the challenging backdrop and expectations and slow policy adjustment so far,” analysts Sebastian Rondeau, Christian Gonzalez Rojas, David Hauner and  Claudio Irigoyen said in the report titled “Argentina — Time for action.”

“We expect a staff level agreement to be reached by January, which then has to pass through Congress and finally receive the approval of the IMF board. We expect a finalized deal by March,” the analysts argue echoing an earlier forecast issued November 24.

“Execution risks remain high, amid gradual adjustment, tight schedule and political frictions. Watch faster ARS depreciation,” the added in the note.

The publication Bretton Woods Project reported today that the tensions are escalating between the IMF and Argentina as both parties negotiate surcharges, the length of repayment period, and the pace of proposed fiscal spending cuts.

Argentina has defaulted nine times on its sovereign debt, has no access to international capital markets and owes USD2.1 billion to the IMF in December, followed by USD18.8 billion in 2022. The nation’s economy contracted 9.9% last year, and in its most recent regional economic outlook the IMF projects a 7.5% recovery for 2021 continued by a 2.5% expansion next year.
A new agreement with the IMF will replace a failed USD57 billion three-year stand-by program approved on June 2018 and signed by the administration of former President Mauricio Macri. The South American nation owes USD45 billion to the fund.

Also Relevant:
* Tensions escalate between Argentina-IMF ahead of crucial loan repayment deadline
* BofA Sees Argentina Reaching IMF ‘Staff-Level’ Accord in January, Deal By March
* Martín Guzmán: “Queremos resolver el acuerdo con el FMI este año”
Goldman Says Argentina Midterm Results May Complicate IMF Talks
* Morgan Stanley Says Argentina Likely to Sign a ‘Soft’ IMF Program by 2Q 2022
Former IMF’s Werner Says Argentina Will Not Pay The Fund: Reuters
Guzman Says Argentina Working on New IMF Credit Line, ‘Healthy Accord’: Pagina 12
To contact journalist of this story:
Email: jearrioja@zignox.com


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