ARGENTINA – Argentina’s government has unexpectedly asked for the early release of a $50bn (RM206.33 billion) loan from the International Monetary Fund (IMF) amid a growing economic crisis.
President Mauricio Macri said the move was designed to restore confidence in the Argentine economy.
The Argentine peso has lost more than 40% of its value against the US dollar this year and inflation is rampant.
The IMF confirmed on Wednesday it was looking to strengthen the arrangement and changing its phasing.
“I stressed my support for Argentina’s policy efforts and our readiness to assist the government in developing its revised policy plans,” Christine Lagarde, the International Monetary Fund’s managing director, said in a statement.
Investors are concerned Argentina may not be able repay its heavy government borrowing and could default.
Correspondents say the decision to speed up the IMF bailout smacks of growing desperation.
When the terms of the loan were agreed in May, President Macri said he expected the economy to recover and did not plan to use the money.
What did the president say?
“Over the last week we have seen new expressions of lack of confidence in the markets, specifically over our financing capacity in 2019,” Mr Macri said in a televised address.
“We have agreed with the International Monetary Fund to advance all the necessary funds to guarantee compliance with the financial programme next year.
“This decision aims to eliminate any uncertainty.”
He added that further measures to rein in government borrowing would accompany the move.
What do his opponents say?
Mr Macri’s decision to ask the IMF for help in May was criticised by many within his country.
The IMF is widely loathed in Argentina and blamed for the country’s 2001 economic collapse after it pulled the plug and denied financial support.
The country’s opposition blames Mr Macri’s centre-right policies, including the end of capital controls and cuts to social programmes, for the economic crisis. -BBC