Although the IMF has already lent Argentina $14 billion, the country can expect further aid of about $5 billion from the IMF, the World Bank and the Inter-American Development Bank (IADB) in support of a tough program.

the World Bank continues supporting Argentina

East West Debt, solving defaulted trade and bank debt

East-West Debt march 2003 news, update : ARGENTINA

We are pleased to present another issue of East-West Debt news update on the debt situation in the world. International events influence the solutions for solving overdue trade and bank debts. East-West Debt can offer our readers attractive financial solutions for solving non-performing trade and bank debts ...

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defaulted emerging market debt

Argentina
The Inter-American Development Bank is lobbying with the IMF to reach a loan deal with Argentina. The IADB has also been trying to persuade the Argentine government to make the payments due to the Bank and the IMF. Argentina is due to repay to the IADB about $680 million on an earlier loan and a further $1 billion to the IMF. Argentina, which defaulted on payments to the World Bank for the second time in the last three months, is so far current on all its payments to the IADB. However, the payment to the IMF must be paid instantly because it has already been delayed once. The IMF is expected to roll over other upcoming payments to help Argentina keep its economy afloat as it struggles with its worst financial crisis ever.

The IMF applied this strategy already in 2002 when it gave Argentina more time to make a $2.8 billion loan payment that was due September 2002. However, it poured cold water on hopes of a wider aid package for the struggling Argentine economy. The IMF insisted that the country must first draw up a restructuring plan for the bank sector, create a monetary anchor, ensure Central Bank independence, and implement fiscal agreements between the central and provincial governments before aid could resume.

The International Finance Corporation is another organization which has made loans to Argentine companies in 2002 even though the losses on its Argentine portfolio l a s t y e a r made a significant dent in profits. The IFC has over $1 billion of exposure to Argentina and is considering further loans for companies threatened by bankruptcy. The IFC would like to continue to lend to Argentine clients where possible, particularly in areas such as trade finance. However, the fact that Argentina has defaulted to the World Bank, which is IFC's sister institution, may halt the assistance.

In order to keep the economy floating, Argentina has won the support of the G7 group of leading industrial nations. The G7 will reopen the flow of international loans to the country. The G7 is the biggest shareholder in the IMF so its support for any package of measures could carry considerable weight. The G7 is believed to be discussing how to support a short-term agreement between the IMF and Argentina, which is entering its fifth year of recession.

ALGERIA ARGENTINA BRAZIL EGYPT
INDONESIA IRAN IRAQ CONGO NIGERIA PAKISTAN TURKEY UKRAINE SAUDI-ARABIA AZERBAIJAN

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