Argentina

Argentina is talking to the International Monetary Fund (IMF) about a possible new financing program with different targets for the embattled economy, U.S. Treasury Secretary Janet Yellen said after meeting Economy Minister Luis Caputo, Reuters reported. The new government of libertarian President Javier Milei is willing to take "very promising" steps to deal with the South American's economy's underlying problems, Yellen told Reuters on Thursday after her first meeting with Caputo.

Argentina’s economy contracted in December by the most since the peak of the Covid-19 pandemic as newly elected President Javier Milei put in motion shock austerity measures that slammed the brakes on consumption, Bloomberg News reported. Economic activity in December fell 3.1% from November, according to government data published Thursday, a drop not seen since April 2020. From the same month a year earlier, activity fell 4.5%, more than the 3.2% decline forecast by economists surveyed by Bloomberg. The contraction was driven by declines in the financial sector, manufacturing and commerce.

Argentina must pay a large deposit in a case brought by hedge funds seeking $1.5 billion in compensation for losses in the nation’s growth-linked securities, London’s Court of Appeal ruled, Bloomberg News reported. The South American nation must pay down €310 million ($337 million) before a full appeal is heard. Hedge funds, including Palladian Partners LP, won the case for compensation in a lower court last year. Argentina has until April 5 to deposit the cash in a trustee account, a judge ruled Thursday.

The International Monetary Fund’s executive board approved a $4.7 billion disbursement to the government of Argentine President Javier Milei, Bloomberg News reported. The payments are part of a refinanced $44 billion program, the lender’s largest, that was beset by uncertainty for months during the election campaign that saw Milei oust the Peronist government of Alberto Fernandez. The board’s decision Wednesday follows a staff-level agreement reached in Buenos Aires earlier this month.

The International Monetary Fund revised down its growth estimate for Argentina, forecasting South America’s second-largest economy will shrink for two consecutive years as President Javier Milei pushes for a “significant policy adjustment,” Bloomberg News reported. Argentina’s gross domestic product will contract 2.8% this year as inflation soars, following a 1.1% decline in 2023, according to the IMF’s latest estimates for the global economy published Tuesday. Back in October, the Fund forecast 2.8% growth in 2024.

Argentina's annual inflation rate ended 2023 at 211.4%, the highest since the early 1990s, official data showed on Thursday, propeling the embattled South American country's year rise in prices above Venezuela for the first time in decades, Reuters reported. Argentina's monthly inflation also hit 25.5% in December, below forecasts, after a sharp devaluation of the local peso by the new government of libertarian President Javier Milei, who came into office last month pledging to fix the economic crisis. The inflation data, the first involving a period since Milei took office on Dec.

Argentina's international dollar bonds rose on Thursday after the International Monetary Fund (IMF) staff and the government reached an agreement that should unlock some $4.7 billion from the country's embattled loan program with the fund, Reuters reported. The agreement removes in the short-term the risk of Argentina falling behind on IMF repayments. "Getting the program back on track is positive," Goldman Sachs analyst Sergio Armella wrote in a note, adding the program had been "derailed" last year when the previous government missed economic targets set out in the program.

Argentina's monthly inflation rate likely soared to 28% in December, which would be the highest since early 1990, driven by a sharp devaluation of the peso currency last month by the new government of libertarian President Javier Milei, Reuters reported. The median forecast from 20 local and foreign analysts polled by Reuters underscores the challenge facing the South American grains giant, with annual inflation set to top 200% for the year, one of the highest rates in the world.

Argentina is set to make a near $1 billion payment to foreign bondholders this week while the government of President Javier Milei continues talks with the International Monetary Fund as he seeks to restore investor confidence in the serial-defaulting nation, Bloomberg News reported. Interest on several hard-currency bonds comes due Tuesday, marking a major test for Milei just a month after he took office promising to overhaul South America’s second-largest economy.

Argentine President Javier Milei is proposing a local debt swap that could top $71 billion, aiming to stabilize the country’s finances by pushing off maturities and reducing the deficit to zero, Bloomberg News reported. Economy Minister Luis Caputo and Finance Secretary Pablo Quirno told representatives of local and foreign banks operating in Argentina that they plan to issue new peso bonds in February to swap for the 2024 maturities, according to four people with direct knowledge of the meeting that took place Thursday afternoon.