The order of the IMF is the story of a failure. And it is the payment of a very high political cost to Macri, at the head of a country that for years accused the Fund of being behind Savage adjustments and major economic crises. But Macri had no choice, so much so that he decided to take responsibility for the announcement himself. In a hostile context for the region’s currencies, the Argentine peso highlighted their vulnerability. The currency reached 23.50 pesos in the middle of the morning, despite extraordinary measures to prevent it. During the last week, the central bank rose 32,25% to 40% interest rates, in an attempt to discourage investors who were fleeing at full speed from the weight and turned to the u.s. currency. The decision calmed the markets, but spring lasted only until today. The bag accompanied the bad weather with a fall of almost 5% in the middle of the wheel.
Argentina has an economy vulnerable to external noise. In his message, Macri clearly described the origin of the problems.”We implemented a gradualist economic policy to resolve the disaster left in our public accounts. That depends on external financing and over the past two years we have had a favourable context. But this is changing by different factors: interest rates rise, crude oil rise, emerging currencies have been devalued”
Hours later, Lagarde issued a statement confirming the start of negotiations with Argentina, without giving details: “Argentina is a valuable member of the International Monetary Fund. I am grateful for the statement that President Macri made today and look forward to continuing our cooperation with Argentina. Discussions have begun on how we can work together to strengthen the Argentine economy and we will hold these talks shortly.”
The IMF, a history of disagreements
The first time Argentina received money from the IMF was in 1957, when the military that had overthrown Juan Perón asked for $ 75 million. The last in January and September 2003, for $ 10 billion. The relationship ended in 2006, when President Nestor Kirchner cancelled the total debt. It was an economic decision, but above all political. For many Argentines, the IMF was and is synonymous with adjustment and its role in the 2001 debacle, where it withdrew funding from Fernando de la Rúa’s government, was questioned even outside the South American country.