Buenos Aires, the capital of Argentina, has recently asked the IMF to defer repayments on a $44 billion loan for the next three years. This type of request has been asked around 20 times in the past so it is not surprising that it would come up again, especially since COVID has had it negative reach all around the world. The root of their problem is the lack of competitive nature surrounding their currency which is the peso. The peso isn't exactly the currency that people are necessarily chasing in Argentina especially since a US dollar is worth more. Argentina started negotiating with private creditors in March of 2020 but stopped in late August. Trump actually helped with an IMF program that provided frontload financial support in exchange for promises of reforms. With 40% of the population under the poverty line, Argentina is now is an economic crisis that may cross-over into political territories and they must secure a new solution sooner rather than later since the US presidency may have an effect as well.
Written by: Cristian Madrigal
SOURCE: Foreign Policy Article
No comments:
Post a Comment