Argentina’s president Mauricio Macri said on Wednesday that the International Monetary Fund (IMF) agreed to accelerate funding in support of his government’s austerity programme.
However, the announcement did not calm the market as the country’s currency came under renewed pressure.
IMF chief Christine Lagarde said the Washington-based lender would look at speeding up payments of the bank’s US$50 billion (Dh184bn) loan after talks with Mr Macri on Wednesday.
The IMF approved the $50bn, three-year standby loan in June.
Ms Lagarde said the IMF would work to strengthen its arrangement with Argentina and “re-examine the phasing of the financial programme”.
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Risk of escalating emerging market pressure looms
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The “more adverse international market conditions” battering Argentina’s economy “had not been fully anticipated,” she said.
Mr Macri called for the early release of the funds in a phone call with Ms Lagarde on Wednesday.
It came amid heightened volatility in Argentina’s financial and currency markets, which have been battered by uncertainty over inflation, an economic downturn and budget deficits.
The Argentine peso has lost more than 40 per cent of its value against the dollar this year. Inflation is projected to surpass 30 per cent by the end of 2018.
And the peso continued its decline on Wednesday, plummeting 6.99 per cent through the day to fall to 34.48 to the dollar by the close.
Mr Macri had sought to soothe the turbulence in a statement before markets opened, assuring Argentines that help was on the way.
“Over the past week, we have had new expressions of lack of confidence in the markets, especially over our ability to obtain financing for 2019,” Mr Macri said.
He said the IMF would provide “all the funds necessary to guarantee the fulfilment of the financial programme next year”.
In return for an accelerated loan payment, the government has committed to reducing its budget deficit to 2.7 per cent this year, from 3.9 per cent in 2017, and to 1.3 per cent of GDP next year.
Doubts over Argentina’s ability to repay heavy government borrowing have grown and analysts said the move reflected growing desperation in Mr Macri’s centre-right government.
“The announcement was vague and was made by the president, which has its risks,” said analyst Lorenzo Sigaut, of consultants Ecolatina, who said it would have been more convincing if the announcement had been made by the economy minister.
Overall doubts of an Argentine default on borrowings had been assuaged “only until Macri’s term ends (in December next year) but as of 2020, they remain latent”.
“The dollarisation of assets is fuelled internally by Argentines’ distrust of the peso, because the government has promised much on the economy but hasn’t delivered,” said Mr Sigaut.
Part of the $50bn loan is to be allocated to support the budget, and the rest to the country’s central bank to shore up the peso over a three-year period.
The first $15bn tranche has already been released.
Economist Matias Carugati said there was a lack of information coming from the government to calm the markets.
“We know that the IMF is advancing money to cover us next year, but how much will they advance us and under what conditions?” he asked.
He maintained however that “the risk of a default is exaggerated”.
“Argentina does not have a solvency problem, but more a short-term liquidity issue. It’s urgent to achieve financial calm and then see how to repair the damage.”
The economy contracted 6.7 per cent in June, the third month in a row of negative growth, and the annual growth rate was a negative 0.6 per cent.
The bio
Favourite book: Peter Rabbit. I used to read it to my three children and still read it myself. If I am feeling down it brings back good memories.
Best thing about your job: Getting to help people. My mum always told me never to pass up an opportunity to do a good deed.
Best part of life in the UAE: The weather. The constant sunshine is amazing and there is always something to do, you have so many options when it comes to how to spend your day.
Favourite holiday destination: Malaysia. I went there for my honeymoon and ended up volunteering to teach local children for a few hours each day. It is such a special place and I plan to retire there one day.
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
The specs
Engine: Four electric motors, one at each wheel
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A MINECRAFT MOVIE
Director: Jared Hess
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Rating: 3/5
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Tuesday's fixtures
Kyrgyzstan v Qatar, 5.45pm
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
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2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
Barbie
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Know your camel milk:
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Use it: In your morning coffee, to add flavour to homemade ice cream and milk-heavy desserts, smoothies, spiced camel-milk hot chocolate.
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The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
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Who is Allegra Stratton?
- Previously worked at The Guardian, BBC’s Newsnight programme and ITV News
- Took up a public relations role for Chancellor Rishi Sunak in April 2020
- In October 2020 she was hired to lead No 10’s planned daily televised press briefings
- The idea was later scrapped and she was appointed spokeswoman for Cop26
- Ms Stratton, 41, is married to James Forsyth, the political editor of The Spectator
- She has strong connections to the Conservative establishment
- Mr Sunak served as best man at her 2011 wedding to Mr Forsyth
UAE currency: the story behind the money in your pockets
Results
Stage three:
1. Stefan Bissegger (SUI) EF Education-EasyPost, in 9-43
2. Filippo Ganna (ITA) Ineos Grenadiers, at 7s
3. Tom Dumoulin (NED) Jumbo-Visma, at 14s
4. Tadej Pogacar (SLO) UAE-Team Emirates, at 18s
5. Joao Almeida (POR) UAE-Team Emirates, at 22s
6. Mikkel Bjerg (DEN) UAE-Team Emirates, at 24s
General Classification:
1. Stefan Bissegger (SUI) EF Education-EasyPost, in 9-13-02
2. Filippo Ganna (ITA) Ineos Grenadiers, at 7s
3. Jasper Philipsen (BEL) Alpecin Fenix, at 12s
4. Tom Dumoulin (NED) Jumbo-Visma, at 14s
5. Tadej Pogacar (SLO) UAE-Team Emirates, at 18s
6. Joao Almeida (POR) UAE-Team Emirates, at 22s
Killing of Qassem Suleimani
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