With Fed Chair Jay Powell implying that "emerging markets are on their own", it appears the collapse of Argentina"s currency has sent them running into the arms of The IMF to secure a bailout.
Bloomberg reports that Argentina is said to have negotiate a $30 billion credit line with The IMF. This report follows Argentine President Macri addressing the nation noting that "market conditions are more difficult" and that Argentina "is one of the world"s countries that most depends on debt" (rather like America).
As @DanCancel tweeted, Macri makes a huge political gamble and unveils talks with IMF for a flexible credit line. The IMF, as people remember, isn"t very well regarded among Argentines. Quite a defining moment in his presidency with re-election next year.
The narrative is already being spun as Economy Miniuster Dujovne backs his President claiming that Macri "inherited a high fiscal deficit" and that Argentina "has progressed since Macri took over." Additionally Dujovne exclaimed that "there is a shift in international markets" and that Argentina is "exposed to global volatility" adding that The IMF bailout is merely a "preventative" measure.
The Peso is rebounding from its earlier crash on the headlines...
Argentina"s 100-Year bonds however are taking it on the chin...
As a reminder, back in March, the Argentine government rebuffed an investor proposal that it should request a flexible credit line from the International Monetary Fund to shore up the nation’s finances, according to three people with direct knowledge of the matter.
How times have changed.
No comments:
Post a Comment