© Reuters. FILE PHOTO: IMF logo is seen outside the headquarters building in WashingtonBy Eliana Raszewski
BUENOS AIRES (Reuters) – The International Monetary Fund said on Wednesday that Argentina’s debts were “unsustainable” and that bondholders in debt talks with the South American country would need to make a meaningful contribution to resolve the crisis.
The statement came as the fund wrapped up a week-long visit to Argentina, which is battling to avoid defaulting on around $100 billion in loans and bonds after a biting recession, high inflation and a market crash pummeled the country last year.
The IMF said a drop in the peso currency and a sharp rise in public debts meant that the country would need a “definitive debt operation – yielding a meaningful contribution from private creditors” to restore debt sustainability.
The statement lends support to Argentina’s new Peronist government which has maintained it cannot pay its debts unless given time to revive growth. Argentina is looking to wrap up debt negotiations with creditors by the end of March.
The fund added that Argentina’s “debt and debt service capacity have deteriorated decidedly” compared to mid-2019 when it categorized the country’s situation as “sustainable, but not with high probability.”
“IMF staff now assesses Argentina’s debt to be unsustainable,” it added.
The IMF said meetings with Argentine officials had been “very productive” and that Managing Director Kristalina Georgieva would meet Argentina’s Economy Minister Martin Guzman at the G20 Finance Ministers summit to discuss “next steps.”
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Source: Economy - investing.com
