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Argentina asks IMF to speed up payments for its $50 billion bailout

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Argentina's president Mauricio Macri speaks during a meeting with Chile's President Michelle Bachelet at the government house during his official visit in Santiago, Chile in this file photo dated June 27, 2017. REUTERS/Rodrigo Garrido
Argentina’s
president Mauricio Macri speaks during a meeting with Chile’s
President Michelle Bachelet at the government house during his
official visit in Santiago

Thomson
Reuters


  • Argentine President Mauricio Macri said he has asked
    the International Monetary Fund to speed up bailout payments to
    the country.
  • The country received the largest bailout in IMF history
    in June.

  • Watch
    the Argentine peso in real time here.


Argentina’s
currency
sank Wednesday after President Mauricio Macri
said he has asked the International Monetary Fund to speed up
bailout payments to the country as its financial crisis deepens.

The peso
was down 0.5% to 31.5 against the dollar after the announcement
during a televised address. The currency has shed about 70%
against the dollar this year and is the worst-performing emerging
market currency of 2018. 

The decision aims to “eliminate any uncertainty that was created
before the worsening of the international outlook,” Macri said.
It was not immediately clear how much the president had requested
from the IMF.

In the largest bailout in IMF history, Argentina scored a
$50 billion credit line from the institution earlier this year.
As part of the three-year standby agreement, the government
received the first $15 billion so far and was poised to get
an additional $3 billion next month.

But the June deal has been slow to calm nerves about the country
with an inflation rate of nearly 30%, soaring twin deficits, and
a currency crisis. 

The rating agency Moody’s on Tuesday cut
its growth forecast for Argentina
, estimating gross domestic
product will contract by 1% next year, compared with previous
expectations for a 3% expansion. The agency cited a
ballooning debt burden and a weakening peso.

Further weakening of the Argentine peso will increase the burden
of the country’s foreign-currency debt, the agency said.
Total debt burden in the country is expected to reach 70% of
gross domestic product next year, up from 50% in 2017. 

An unfolding
graft scandal in the country
, which Moody’s has previously
labeled credit negative for Argentine corporations, could also
weigh on growth. 

More than two dozen business and government officials,
including a vice president, have been arrested in a
case 

involving illegal payments for favors like
public-works contracts that allegedly took place over a decade
under President Cristina Fernandez de Kirchner.

The scandal came to light in early August, when Buenos
Aires-based newspaper La Nacion published excerpts from the
notebooks of a former driver in the Fernandez administration. The
notebooks purportedly detailed how he transported roughly $160
million in bribe payments from construction companies to
government officials from 2005 until 2015.

IMF economists and technicians are in meetings with
government officials in Argentina to review parts of the new
agreement, according to Bloomberg. 


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