Paris Club Says Argentina Has Committed To IMF Deal By Next March

• Argentine authorities are committed to reach an agreement with the International Monetary Fund no later than the end of March as part of an understanding with the Paris Club to avoid default, according to the group’s second-ranking official. 
• The country also agreed to treat all other external creditors in a comparable way as part of an accord with the group of wealthy nations in which it will make a partial payment, the Club’s Secretary General Schwan Badirou-Gafari said in an emailed response to questions. 
• “Given the commitments made by the authorities regarding the conclusion of an agreement with the IMF as soon as possible and not beyond end March 2022, as well as their commitment to comply with the comparability of treatment, Paris Club would be in a position to avoid declaring a default at end July,” said Badirou-Gafari. 
• Argentina announced on Tuesday that it would make a partial US$430Mn payment to the club to avoid a default after missing a US$2.4Bn payment that was due last month. 
• As part of the understanding, the country has until March 31 2022 to complete its restructuring with the Club, but Economy Minister Martín Guzmán said that deadline wasn’t going to have any impact on the timeline for IMF negotiations. 
• An IMF agreement would help the country to make policy and fiscal adjustments that will allow for a reduction in the country’s unsustainable debt levels. At the end of December 2020, the country’s government debt stood at 102.5% of GDP (CEIC data) and the government had defaulted on payments twice in 2020. According to Bloomberg, traders are almost certain that it will default once more in 2021.

(Source: BA Times & NCBCM Research)