IMF board met on Argentina for first time since Batakis was named economy minister

The International Monetary Fund’s board of executive directors met on Friday to discuss the $44 billion Argentine programme for the first time since Silvina Batakis’ appointment as economy minister, two people with direct knowledge of the meeting said.

The IMF later confirmed the meeting had taken place and gave no further details.

In an informal meeting, the fund’s staff said Batakis, who was sworn-in on Monday, was in the process of selecting her team, and once ready the first contacts between technical level IMF officials and new Argentine officials will be made.

Staff also informed the Board that they were keeping a close watch on market conditions, as some of Argentina’s dollar bonds were now trading in very distressed territory under 20 cents on the dollar, said one of the people.

Both asked not to be named because talks are confidential.

“IMF staff regularly hold information sessions with Executive Board Members on policy and country matters,” an IMF spokesperson said via email.

“In this context, today IMF staff briefed the Executive Board on recent economic developments in Argentina.”

Argentina’s economy ministry did not reply to a request for comment.

The purpose of the meeting was to update the board on the state of affairs in Argentina, the fund’s largest debtor, the sources said.

The meeting was attended by Ilan Goldfajn and Julie Kozack, the head and deputy director of the IMF’s Western Hemisphere Department, as well as Luis Cubeddu, the IMF’s chief of mission to the country.

Sergio Chodos, who will continue to be Argentina’s representative at the IMF, was also present.

Former economy minister Martin Guzman, the architect of the South American country’s deal with the IMF, resigned abruptly on Saturday as tensions within the government coalition boiled on how to handle the economic crisis.

His departure sparked concerns of a shift towards populist policies and state spending in the country where inflation is running above 60%.

Overseas bond prices fell amid raising concerns that the new government would seek to change the terms of the IMF deal.

The executive board completed on June 24 the first review of the extended fund facility (EFF) programme and released $4 billion after the fund said Argentina met all end-March 2022 quantitative targets and made progress toward implementing the structural commitments under the program.

Separately on Friday, the Argentine government said it made scheduled payments to the Fund for about $1.3 billion.

Earlier this week, Batakis told IMF officials that she supported the objectives of the fund’s programme and would work constructively with the global lender.

IMF chief Kristalina Georgieva said on Wednesday she had a “very good call” with Batakis about the continuation of the programme.

After a private debt restructuring and an IMF deal, Argentina still needs to work on some $2 billion it owes the Paris Club of creditor nations. Talks were originally scheduled to continue this week, but the meeting in the French capital was postponed after Guzman’s resignation.

A Paris Club source said on Thursday that the new economy minister must give her commitment to an IMF programme in order for the club to open talks.