Argentina

In this South American nation stretching from lush jungles in the north to the edge of the Antarctic at its southernmost point, the country’s 45 million people are weighing a vote for change ahead of presidential elections on Sunday, Bloomberg News reported. At the heart of the decision is economic hardship that has roiled Latin America’s No. 3 economy since the middle of last year. It has hurt President Mauricio Macri, who under pressure had been pushing austerity measures to rein in debt.

Argentina’s bondholders are braced for steep losses when the government attempts to tackle its $101bn debt burden after downbeat meetings with IMF officials and associates of Alberto Fernández, the presidential frontrunner, in Washington last week, the Financial Times reported. More than 20 bondholders met a team of IMF officials to discuss the outlook for Argentina ahead of the country’s general election this Sunday.

The International Monetary Fund will stand by Argentina as it works through its economic crisis, Managing Director Kristalina Georgieva said on Thursday. She added that the Fund was waiting to see the future policy framework adopted by the Latin American country, which holds an election later this month in which a change of government is widely predicted, Reuters reported.

Just three years after Argentina’s local markets were brought back from the dead, they’re barely clinging to life, Bloomberg News reported. Assets under management at local banks and brokerages have plummeted 25% since a surprise August primary vote that signaled pro-business President Mauricio Macri has little chance of winning re-election this month. Stock trading has fallen by half, and local bond volume is down by two-thirds.

Argentina’s Sergio Massa, a key ally of presidential front-runner Alberto Fernandez, said on Friday that the International Monetary Fund should give the indebted country time to revive economic growth to be able to pay off its debts, Reuters reported. Massa, a former Argentine chief of staff who struck an alliance with Peronist opposition leader Fernandez earlier this year, said the IMF should see the relationship with Latin America’s No. 3 economy as a long-term journey.

Argentine economists forecast a deeper recession and maintained a pessimistic inflation forecast at a shade under 55% in the latest central bank monthly poll of analysts released on Wednesday, Reuters reported. The prediction follows weeks of political uncertainty and a plunge in the value of the peso after Alberto Fernandez, a Peronist candidate, soundly beat market-friendly incumbent President Mauricio Macri in an August primary election.

Argentina’s creditors holding out hope that they can avoid losses on the country’s bonds are “living in fantasy land”, one big investor said, reflecting tensions over the government’s reorganisation of its massive debt pile, the Financial Times reported. Alberto Fernández, who is expected to win presidential elections later this month, has assured markets that losses on bonds would not be necessary as part of the debt’s “voluntary reprofiling”, as long as creditors give Argentina’s economy time to start growing again.

Argentina’s presidential front-runner Alberto Fernandez said that if elected next month, he would aim to avoid haircuts on bond payments and seek a moderate “Uruguay-style” debt restructuring, music to the ears of the country’s creditors, Reuters reported. Investors are closely watching Fernandez’s comments on debt after the South American nation was forced to announce plans to renegotiate around $100 billion in bonds after a sharp market crash in August pushed the country toward default.

British emerging markets investor Ashmore Group is betting that Argentina’s current crisis, that has seen the country veer toward default, is not as bad as it looks, Reuters reported. The investment manager is buying Argentina’s dollar bonds in the belief the clear favorite to win next month’s general election, Alberto Fernandez, will be less radical in overhauling the government’s debt than markets now expect, one of its executives said on Wednesday.

Argentina’s financial program with the International Monetary Fund will be on hold for some time as the nation grapples with severe political and economic uncertainty, the Fund’s Acting Managing Director David Lipton said an interview, Bloomberg News reported. “Our job in this setting is to help them get through this period, give them advice, work toward an eventual resumption of a relationship -- some kind of financial relationship with them -- which may have to wait awhile,” Lipton told Bloomberg Radio on Wednesday.