UPDATE 2-IMF increases Argentina financing deal to $56.3 bln
UPDATE 2-IMF increases Argentina financing deal to $56.3 bln Reuters Friday October 26, 2018 14:59
(Adds market reaction, background)
WASHINGTON/BUENOS AIRES, Oct 26 (Reuters) - The International Monetary Fund on Friday increased the size of a standby financing agreement for Argentina to about $56.3 billion, closing a deal the country has said would come with tougher fiscal measures.
Argentinaâs President Mauricio Macri agreed to a $50 billion IMF deal in June, hoping it would stop a run on the countryâs peso currency.
But the peso kept falling, forcing him to renegotiate the agreement. Following a meeting of the IMFâs board on Friday, the international lender issued a brief statement that did not specify the terms of the revised financing agreement.
Argentina has said the new agreement will require the government to make deeper spending cuts and increase taxes more to bring the South American nationâs primary fiscal deficit, projected at 2.7 percent of gross domestic product in 2018, to zero next year. Macri is preparing to run for a second term in late 2019.
The peso was steady following the announcement of the deal.
Cutting the deficit during a presidential election year is almost unheard of in Argentina. Wide swaths of the population have come to rely on welfare programs and subsidies that helped the country recover from a 2002 economic crisis that tossed millions of middle-class Argentines into poverty.
Macriâs popularity has fallen as he has cut pension benefits and public utility subsidies. Riot police fired rubber bullets at anti-austerity protesters in front of Congress on Wednesday as lower house lawmakers debated and then approved the governmentâs 2019 budget bill, which codifies fiscal targets agreed with the IMF. (Reporting by Jason Lange in Washington and Hugh Bronstein in Buenos Aires; editing by Paul Simao and Tom Brown)Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.