The IMF has no good options—but it may have just selected the worst
Yet the economy may implode before any candidate gets to fix it. On August 23rd the government persuaded theto release a $7.5bn tranche of its bail-out programme, its only hope of meeting dollar-debt repayments and staving off default. The’s reluctance stemmed not from the fact Argentina is broke—lending to such countries is the fund’s purpose—but from the fact that most of the cash Argentina must repay this year is promised to the fund itself.
is the first to be repaid. It never takes a loss during debt restructuring. This lets it and other multilateral institutions, including the World Bank, hand out cheaper rescue packages. The approach has worked when packages are small enough that even troubled countries are able to repay them.took a gamble and offered the country a bail-out worth $57bn, the fund’s biggest ever. At the time, many observers thought it was too much for a country with Argentina’s patchy track record.
Meanwhile, Argentina desperately needs a lasting fix. Each month without one deepens the country’s economic woes. Inflation worsens as imports become more expensive and monetary policy flirts with fiscal dominance, where the government borrows so much the central bank has no choice but to bail it out. The longer Argentina limps on without restructuring, the more damaging the process will be when it happens. In the past three months, Argentina has racked up short-term debts of $1.
United Kingdom Latest News, United Kingdom Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Cristiano Ronaldo's response to being 'hated' in Argentina sums him up perfectlyCristiano Ronaldo displayed elite mentality in abundance when told he is not liked in Argentina.
Read more »
Argentina's World Cup hero and the rape allegations he deniesWorld Cup winner Gonzalo Montiel has just signed for Nottingham Forest. Argentina prosecutors are investigating him over an alleged rape
Read more »
Argentina's World Cup hero and new Nottingham Forest signing Gonzalo Montiel facing rape allegationNew Nottingham Forest signing Gonzalo Montiel is under investigation over an alleged rape, which he denies, dating back to 2019
Read more »
Iran and Saudi Arabia among six nations set to join Brics economic blocThe United Arab Emirates, Argentina, Egypt and Ethiopia are also set to join the bloc from 2024.
Read more »
Iran and Saudi Arabia among six nations set to join Brics economic blocThe United Arab Emirates, Argentina, Egypt and Ethiopia are also set to join the bloc from 2024.
Read more »
BRICS Asks Saudi, Iran, Other Nations to JoinMajor emerging market nations invited Saudi Arabia, Iran, Egypt, Argentina, Ethiopia and the United Arab Emirates to join their bloc.
Read more »