Argentina

Argentina, one of the world’s most prominent defaulters, is pushing for a new way to service debt: Instead of paying creditors with cash that’s on short supply in Buenos Aires, it wants them to recognize the country’s efforts to tackle climate change, Bloomberg News reported. “We need more flexibility to honor that debt,” President Alberto Fernandez said, at a United Nations climate summit, of about $46 billion that Argentina owes to the International Monetary Fund.

Argentina’s President Alberto Fernandez said the country is “absolutely” committed to reaching a deal with the International Monetary Fund, Bloomberg News reported. Fernandez at the same time made clear that his government won’t risk rushing into an agreement if it’s a poor one for Argentines, in comments delivered at the closing of an event with top business leaders. “We’ll keep discussing until we’re sure we’ll have the resources to make Argentina stand on its own two feet again,” he said.

The International Monetary Fund’s board of directors turned down a request by Argentina to discuss relief on the commissions the country pays for its record loan, a setback for the government of President Alberto Fernandez, Bloomberg News reported. In an informal meeting held last month, the board rejected a proposal to discuss temporary relief on so-called surcharges, which are the commissions charged to countries that use the lender’s credit lines extensively.

Argentina’s monthly inflation eased more than expected in August to a 13-month low as food and living cost increases lost some momentum, Bloomberg News reported. Consumer prices rose 2.5% in August from a month earlier, the lowest level since July 2020 and less than economists’ median estimate for a 2.9% increase. From a year ago, inflation reached 51.4%, one of the highest levels since President Alberto Fernandez took office in December 2019.

The Argentine government’s election loss on Sunday weakens Economy Minister Martin Guzman’s negotiating power with the International Monetary Fund over its record $45 billion debt, according to one of the nation’s former representatives with the fund, Bloomberg News reported. President Alberto Fernandez’s coalition was defeated in primary congressional races in the majority of Argentina’s provinces, as well as in the capital, reflecting discontent over rising poverty and 50% inflation ahead of the general midterms on Nov. 14.

Molino Cañuelas, one of Argentina's leading food producers, has filed for the local equivalent of Chapter 11 after years of disputes with creditors, the Buenos Aires Times reported. Molca, as the company is known in Argentina, could not reach an agreement with creditor financial institutions, so it was forced to request the opening of bankruptcy proceedings, the firm reported in a statement sent by email via an outsourced public relations firm. The company owes US$1.4 billion to domestic and foreign debtors, including ING Groep NV and Rabobank UA, a spokeswoman confirmed.

Axel Kicillof, the outspoken governor of Buenos Aires, called journalists to one of the province’s opulent 19th-century mansions and conceded defeat. It was early 2020, just weeks before the pandemic hit, and Kicillof, a man reviled in investing circles for his brash negotiating style when he was economy minister during Argentina’s default a decade ago, was once again doing battle with creditors. This time around, he lamented bondholders’ “enormous intransigence” in refusing his province’s request to delay a $250 million bond payment.

Argentina’s Province of Buenos Aires says it received creditor support to restructure 98% of its $7.1 billion in overseas debt, putting it a step closer to ending a 16-month default, Bloomberg News reported. The province, which is Argentina’s largest and most populous, will swap all of the bonds it had offered to exchange except for dollar-denominated notes due 2021 and euro-denominated bonds due 2020, which had been issued under indentures that required a higher amount of creditor participation, according to a statement. The deal is expected to settle Sept. 3.

Argentina’s central bank is making it harder for investors to buy dollars as the already draconian capital controls fail to stop the gap between the official and parallel exchange rates from widening, Bloomberg News reported. Regulators are tightening the screws on operations where investors buy assets in pesos and sell them abroad in dollars to obtain foreign currency. The measures, aimed at money laundering and tax evasion, were announced late Thursday. It’s the latest set of controls to prevent dollars flowing out of Argentina’s crippled economy.